SAP Business Process MM

SAP MM is one of the modules of SAP that deals with material

management and inventory management.Never a shortage of
materials or any gaps in the supply chain process. MM speeds up
the procurement and material management activities,Deals with
the Procurement Process, Master Data Material & Vendor Master ,
Account Determination & Valuation of Material, Inventory
Management, Invoice Verification, Material Requirement Planning
etc.

Activity
Define Organisation structure

Client
Company Code/ Its subsderies
Plant Code
Storage Location
Purchase Organisation
Purchase Group

CREATION OF COMPANY
6 DIGIT
GROUP OF ORG
LEGAL CONDITIONS OF COUNTRY

COMPANY CODE

4 DIGIT ALPHA NUM CODE

TO DO ALL FINANCIAL TRANSACTIONS
BY USING PL- BAL SHEETS
TO GET THE FINACIAL REPORT

ASSIGN COMPANY TO COMPANY CODE

INTERLINK BETWEEN COMP - COMPANY CODE

Create Plant
PLANT ADDRESS
4 DIGIT ALPHA NUM CODE
 TO DO ALL INVENTRY TRANSACTIONS
STOCK Balance

Create Storage Location

Storage location is an organizational unit which actually

differentiates between different material stocks in a Plant. Storage
location is a place where stock is kept physically

Create Purchasing Organization

Purchasing Organization is an organizational unit under company
or plant which is responsible for procurement activities according
to requirements. It is responsible for external
Procurement.Purchasing organization can be specific to plant or
company

Create Purchasing Group

Purchasing group is an organizational unit which is responsible for
everyday procurement activities within an organization.

Organizational units combined altogether form the framework of

company. These organizational units can be considered as
different levels which describe the structure of an enterprise.Also
every level in one or other way is related to each other.These
levels are placed according to some hierarchy company being at
the top.

Plant to Company Code

Plant is one level below company code. So we need to assign plant
to company code.

Purchasing Organization to Company Code

Purchasing organization can be at company code level i.e.
centralized purchasing organization. So we need to assign this
purchasing organization to company code.

Purchasing Organization to Plant

Purchasing organization can be at plant level i.e. plant specific. So

we need to assign this purchasing organization to plant.
 Standard Purchasing Organization to Plant
Standard purchasing organization is the default purchasing
organization. We can sometimes assign standard purchasing
organization to some specific plant if we want to have default
purchasing organization for that plant.

Material Types

Materials with some common attributes are grouped

together and they are assigned to a material type. This will
differentiate materials and allow organization to manage
different materials in systematic manner in accordance to
company’s requirement. For example: Raw Material, Finished
Products are some of the material types.

Number Range

When we create material master record every material is

recognized by a number, that number will be unique and known as
material number. We can assign number to material through two
ways:
External number assignment - While creating material you have to
enter your own number containing alphabets or digits,that should
be unique.
Internal number assignment - While creating material you need
not enter any number, system will automatically generate a
unique number to that material
 Assignment of Number Range

Assign Fields to Field Selection Groups

This configuration will allow you to make some fields as optional,
or as hidden or some as mandatory in master record.

Material Groups

Material group is a wider range of material type. Materials with

some common attributes are taken together and they are assigned
to material group. For Example: Suppose we have some materials
which need packaging, so there material type can be electrical or
food products but we can group these material types and put
them in packaged material group.

Material Master Creation

Material master contains all materials that a company procures

produces or sells. Material Master is a central data that is available
at all the levels.

This is the enterprise main source of vendor specific data. This

data will include information on vendors from which a company
can procure or it can sell.Vendor Master Record will contain
information like vendor's name, address. Data in vendor master
record is divided into three categories:
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 plants belonging to that company.
Purchasing Data:Purchasing data is maintained at purchasing
organization level.

Vendor Account Group

Vendors are categorized according to requirements and some of

the vendors having similar characteristics are grouped together
and placed in one category. For Example: All local vendors can be
placed under one account group.
 Number Range

When we create vendor master record every vendor is recognized

by a number, that number will be unique and known as vendor
number. As discussed in material master, in similar way we have
external as well as internal number assignment for vendor master.

Assignment of Number Range

After defining we need to assign it to vendor group.

Creation of Vendor Master

Vendor Mater contains list of vendors from which a company can
procure or it can sell.

Purchasing info record stores information on material and vendor

supplying that material. For Example: Vendors current price of a
particular material is stored in info record.Purchase info record
can be maintained at plant level or at purchasing organization
level.

Creation of Purchase Info Record

Enter the vendor number and in info category, select standard or

subcontracting or pipeline or consignment according to the
requirement.
 The combined information of material and vendor altogether is
kept in a record that is known as purchase info record. But a
particular material can be ordered from different vendors in
different time intervals. This information can be maintained in a
list that is called as source list.

Automatic Creation of Source List

Source list can be automatically created by doing some setting in
material master.

Manual Creation of Source List

Every organization acquires material or services to complete its

business needs. The process of buying materials and obtaining
services from vendors or dealers is procurement. The steps which
are required to procure a material forms the procurement cycle.
Every organization performs some common sequential steps so
that a material can be procured in right quantity at the right price.

ME51N - Purchase Requisition - Internal document

ME21N - Purchase order (If vendor is already) -
External document. If there is no vendor then go with
RFQ
MIGO -Goods receipt
MIRO - payment to vendor
 It is an internal document contain the list of requirement raised
within the organization. It is require approval from purchase
Organization or Department head.

Define Number Ranges – Purchase Requisition

When we create purchase requisition every requisition is

recognized by a number, that number will be unique and known as
purchase requisition number. We can define number range
manually otherwise system can automatically assign.

Define Document Types - Purchase Requisition

There are different types of document created for purchase

requisition. So document types for purchase requisition can be
maintained

Define Screen Layout at Document Level

To control Screen layout based on doc type

It is the online approval given by the person responsible for the

release of purchase document.

Release Procedure with Classification

• Characteristics
• Class
• Release Group
• Release Code
• Release Indicator
• Release Strategy

Characteristics

It defines the properties of an object In this we will select the

Purchase Document type & The Total value or as per Client

Class

Characteristics will be assigned to Class, Class type 032: for relase

Set Up Procedure with Classification

• Release Group
• Release Code
• Release Indicator
• Release Strategy

Release Group

It is assigned to class & we can create the release group as per our
requirement.

Release Code

It is an approver of the document.

Release Indicator
It is an indicator which will release and block as per the
requirement.

Release Strategy

It contains the condition in which Release Procedure can apply In

Release Prerequisites tab – we can set the priority as shown in
figure. Release Statuses tab – we have to set the release indicator
as shown in below figure Classification tab – we can set the
condition as shown in below figure

Request For Quotation (RFQ)

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 the material along with their
terms and conditions. This request is known as the request for
quotation (RFQ).

Automatically from Purchase Requisition

Manual Creation of RFQ

An outline agreement is a longer-term arrangement with a vendor

regarding the supply of material.
Outline agreement are of two types namely Contracts and
Schedule Agreement.

Contracts
A contract is a pre-determined long term agreement to supply
material or service for a certain period of time. Specific delivery
dates are not mentioned in the contracts. Contracts can be of two
types: Value Contract or Quantity contract

Schedule Agreement
In Scheduling agreements, we can enter scheduling lines which
gives details of quantity that should be delivered on specific date.
Plant must be entered in Schedule agreement so that materials
can be delivered at plant. These are generally used for materials
whose requirements are predictable.

Schedule Lines
We will now create the delivery dates, Schedule agreement
doesn’t require PO

Pricing Procedure

Pricing procedure is a way to determine prices in purchasing

documents. It gives us functionality to assign different calculation
types for different needs

Calculation Schema – Schema Group

Define Calculation Schema

Define Schema Group

In this step we will define the schema group for vendor & the
purchase organization. Then we will assign to respective vendors
and purchase organization.

a. Schema Groups: Vendor

New Schema Group Vendor created, Now we will assign the

schema group vendor in its master data of the vendors. This is to
be assigned in the purchasing view of the Vendor master data.

b. Schema Groups for Purchasing Organizations

We will create the new Schema group for Purchase Organization

c. Assignment of Schema Group to Purchasing

Organization

As the name suggest the Schema Group is assign to the Purchase

organization.
We will assign Purchasing Organization with Schema Group
 Define Schema Determination

In this Step we will assign the Calculation schema and schema

groups together for Purchase Order functioning

Condition Types – Calculation Schema

In this topic we will see the Calculation Type assigned to

Calculation Schema. Also we will assign the condition table to
Access Sequence & access sequence to condition type.

Define Access Sequences

It searches the condition record for condition types from
conditions table.
We can set the priority from which the condition record/Value
should from its Condition Tables.We can create the new Access
Sequence by clicking on new entries/ copying from existing and
then we can give the Condition table as per our priority to pick the
condition record/ values.

Define Condition Types

It is the specific feature of daily activities in a system & used for

different types of charges like Gross Price, discount, surcharge,
freight etc.
As per our example we are taken gross price for customization.
We can have our own condition type by creating new entries or
copying from other as per business requirement

Creating Condition Record/Value for Condition

Table

We created a new condition,Condition table option to enter the

value which is stored in the access Sequence as we have seen
earlier

Define calculation Schema

Here we maintain sequence for the pricing calculation like Gross
price, Discount etc. We maintain here the calculation for all
condition type & group together all required condition types for
our pricing procedure

In Standard procurement process, we buy the material from the

vendors and after production process we deliver it to customer.
Once deliver is done then goods belongs to the Customer.
In case of special procurement process, the goods are not
necessarily delivered from the vendor to the customers

Consignment
In this type of procurement the goods procured are still in vendors
ownership, but the company is keeping the material on stock and
able to sell it directly where goods become the property of our
company only in case of consuming

In subcontracting, you give components to a vendor from which a

product is produced. The product is then ordered by your
company through a purchase order. The components required by
the vendor to manufacture the ordered product are imported in
the purchase order through the BOM (Bill of Materials), and they
are provided to the vendor. After the contractor has produced the
finished product, we can post the goods receipt

Create BOM for Assembly & Child Part

Magnetic Plug & 3839 – Magnet 3840 are the child part for
10015048 – Oil Drain Plug, hence we can represent it by flow
chart.
To complete the assembly we require the one each child part to
complete

Create Subcontracting PO
PO (Item category L)

Create Transfer Posting to issue Sub Component

Goods Receipt for finished product

Invoice Receipt for Service performed

While Creating a BOM for the Finished Material B, maintain the

Scrap Quantity
Material C as a negative in the component list.
As a result while doing the GR for the finished material B in MIGO,
the scrap material C will be generated as -5kg & movement type as
545 O+ (This will make the material available in material provided
to vendor stock)
Then do the GR with 542 movement type (Reversal of 541- goods
issue movement type) to get the scrap material into plant material

Returnable Transport Packaging (RTP)

It is the process in which the user returns the packaging material
to vendor once utilizes the material through the transporting.
The material type for Returnable Packaging is LEIH

Pipeline Handling
In pipeline handling, the company does not need to order or store
the material concerned. It is ready available as and when required
via a pipeline (e.g. oil or water), or some other type of cable (e.g.
electricity). Consumption of the material is settled with the vendor
on a regular basis.

In Stock Transfer process, Goods are supplied and Procured within

a company. One Plant (issuing plant) orders the goods from
another plant (receiving plant).STO we are using “UB” as a
document type in PO.We can do supply the goods from one plant
to another plant two method way
1) Transfer posting of material plant to plant by one-step/ two-
step method
2) Stock Transfer between two plants with & without delivery

STO (with delivery)

1. Create SD-MM configuration for respective STO (SD team) -

SPRO
2. Create PO for STO (Doc Ty – UB) – ME21N
3. Create Outbound delivery(OBD) for supplying plant – VL10D (SD
Team)
4. Create Post Goods Issue (PGI) for supplying plant – VL02N (SD
Team)
5. Post Goods Receipt for receiving plant - MIGO

STO for without delivery

1) Create MM-SD configuration for respective STO - SPRO

2) Create STO – PO of doc type UB for supplying plant – ME21N
3) Create Goods Issue for 351- movement type for supplying plant
- MIGO
4) Post Goods Receipt for receiving Plant – MIGO

Service Management

Besides procurement of goods, an organization may occasionally

require some kind of services. 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
The Inventory Management deals with the management of stock,
either value (Accounting) or quantity basis. It includes Planning,
entry and keeping record of all the movements of goods.
Goods movement creates a document that updates all the stock
quantity and value in the inventory that is known as material
document.
Material Document shows the movement type & accounting
document describes the type of stock posting in the inventory

1. Goods Receipt
It is the type of inventory where the material is receiving from the
vendor through any source to a plant as new quantity.
Now we will go through some movement type for goods receipt

Origin Acceptance

Acceptance at origin allows acceptance of goods at the supplier

facility before shipment to destination.
The Purchaser acknowledges acceptance but does not perform the
final goods receipt until the goods arrive at the final destination.
The system shows that the items are IN TRANSIT to their final
destination and prevents them from being available for use.
When goods are arrived in respective destination after the final
goods receipt is done, the item changes the status IN TRANSIT to
Available for use.

2. Goods Issue
Goods Issue is the physical issue of the goods or material from the
warehouse. Goods issue posting results in a decrease in stock in
the warehouse.

3. Transfer Posting

Transfer posting deals with transferring of goods from one place to

other for the business requirements.
We have seen the transfer posting in Consignment Process in
which we have transferred the vendor owned stock to company
(purchaser)
Goods Movement Type is 3 digital identifying the type of Good
movement.
The movement type is very important, actually it controls the
adjustment of inventories, and GL related account and even the
screen layout for MIGO transaction.

1XX Series for Goods Receipt

Movement Type Description

101 Goods receipt for Purchase Order
103 Goods receipt into GR blocked stock
105 Release from the GR blocked stock for the purchase order
107 Goods receipt to valuated blocked stock
109 Goods receipt from valuated blocked stock
122 Return deliveries to vendor
124 Return delivery to vendor from GR blocked stock
161 Returns for purchase order

3XX Series for Transfer Posting

Movement Type Description
301 Plant to plant transfer in one step
303 Transfer posting plant to plant - Remove from Storage
305 Transfer posting plant to plant - Place in storage
309 Transfer postings from material to material
311 Transfer of storage location to storage location in one step
313 Transfer of storage location to storage location in two steps :
Remove from Storage
315 Transfer of storage location to storage location in two steps :
Place in storage

321 Transfer of inspection stock : unrestricted-use stock

323 Transfer of storage location to storage location : inspection
stock
325 Transfer of storage location to storage location : blocked stock
331 Sample from the inspection stock
333 Sample from the unrestricted-use stock
335 Sample from the blocked stock
341 Status change of a batch (unrestricted-use to restricted)
343 Transfer of blocked stock : unrestricted-use stock
349 Transfer of blocked stock : inspection stock
351 Goods issue for a stock transport order (without shipping)
4XX Series for Special Stock, Transfer Stock and
Blocked Stock Return
Movement Type Description
411 Transfer of special stock to own stock
413 Transfer posting to sales order stock
451 Returns from customer (without shipping)
453 Transfer of blocked stock returns to unrestricted-use stock
455 Returns stock transfer
457 Transfer of blocked stock returns to inspection stock
459 Transfer of blocked stock returns to blocked stock

7XX Series for Physical Inventory

Movement type Description
701 Goods receipt for unrestricted stock
702 Goods issue for unrestricted stock
703 Goods receipt for quality inspection stock
704 Goods issue for quality inspection stock
707 Goods receipt for blocked stock
708 Goods Issue for blocked stock
711 Inventory difference in unrestricted-use stock (LE-WM)
713 Inventory difference in quality inspection stock (MM-IM)
715 Inventory difference for returns
717 Inventory difference in blocked stock (LE-WM)

Physical Inventory
It is the process to map or to compare the system stock with the
physical stock; this process is performed in 4 different ways
1. Periodic Inventory
Most of the time companies use this kind of inventory. In most
cases, it is done once a year, and this kind of inventory is called
annual physical inventory. That means that material stock is
counted once a year. Most of the times at the end of the year or
after the season end (in seasonal industries).All stocks of the
company are physically counted on the balance sheet key date. In
this case, every material must be counted. During counting, the
entire warehouse must be blocked for material movements.

FI and MM Integration
Automatic Account Determination

All the procurement activities are done right from the material
creation to PO ordering, receiving material from GR etc. Once
every process is done, we need to pay to vendor from the
respective department GL account and for that we cannot do
manually for all the material and it’s very hard to remember.
In Order to deal with this, SAP having a feature where it can
recognize the respective GL account automatically.
PO: - G/ L account comes automatically in account assignment -
material & account assignment category play main role.
Goods Movement: - G/L accounts come automatically – Material &
Movement Type play main role.

1. Material Type – Account Category Reference – Valuation Class

2. Valuation Grouping Code
3. Movement Type – Transaction Key
4. Automatic Posting – OBYC

Split Valuation
It is used to valuate stock of material in same valuation area
differently.

Invoice Verification
In Invoice verification we verify the amount against the PO to pay
the respective vendor
E.g. After receiving the goods from the vendor, we verify the
invoice given by the vendor to pay.
Note: Before going to the examples lets go through some basic
point that we must know while doing the invoice verification.
1. If we flagged “GR-Bsd IV” in item level then we have 3 way
match or it will become as 2 way match as shown in figure.
I.e. in 3 way match we need GR to post the invoice (PO—GR—IR)
&
In 2 way match GR is not necessary we can post invoice with
reference to PO (PO— IR)

Evaluated Receipt Settlement (ERS) for Invoice

Verification
Evaluated Receipt Settlement is the process of settling goods
receipt automatically. The Vendor Invoices are posted
automatically (without actually receiving from the vendor) in the
system based on the information in the purchase order and goods
receipt. The settlement documents are sent automatically to the
vendor in print, email or fax form.
Before implementing ERS, there must be an agreement with the
vendor about ERS process and applicable conditions.
Advantages of ERS:
• Purchase Orders can be closed quickly
• No price and quantity variances in Invoice Verification
• No need to receive invoice from vendor
• Communication errors can be avoided
The following are the pre-requisites for implementing ERS:
• In the vendor master data, the indicators for evaluated receipt
settlement must be activated.
• A Confirmation is expected for the purchase order
• GR – IR Indicators and ERS Indicators should be activated in the
PO
• Tax code must be maintained in the PO item

Automatic PO Process

It is the process in which the PO is automatically created after the

PR. The following are the steps to perform the automatic PO
TCODE
EC01

OX15

OX02

OX16

OX10
 OX09

OX08

OME4

ORGANIZATIONAL UNITS

To establish 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.

OX18

OX01

OX17
 OMKI

Master Creation

OMS2

MMNR
 MMNR

OMSR

OMSF

MM01

Note: For any create transaction we use 1, for MM60 Bulk View
edit 2, for display 3 as suffix. On SAP MM17 Bulk change

Vendor master

OBD3
OMSG
 XKN1

OBAS

TCODE-BP in HANA XK01

FK01 Company Code

MK01 Purchase Org

PURCHASE INFO RECORD(PIR)

ME11

Source Determination/List
 Source list include list of possible sources of
supply for a material over a given framework of
time.Source list specifies the time period of
ordering of a particular material from a given
vendor. Source list can be copied from one plant
to another plant.Source list can be created by
following two ways: Automatically & Manually

MM02

Tick on Source List in Material Code

ME01

Procure to Pay Cycle

Determination of Requirement
Creating Purchase Requisition
Purchase Order
Goods Receipt
Invoice Posting
Payment/Clearing

Purchase Requisition
Purchase requisition can be created for the
following procurement types:
Standard: Getting finished material from
vendor.
Subcontracting: Providing raw material to
vendor and getting finished material.
Consignment: Procuring material that is kept in
company’s premises and paying to vendor for
that one consuming/direct sale to customer.
Stock transfer: Getting material from within the
organization.
External service: Getting services like
maintenance from third party vendor.

OMH7

OLME

OLME

Release Procedure for PR and PO

OLME
 CT04

CL01/CL02

OLME

OLME

OLME

OLME
 OLME

ME41

In the SAP System RFQ is of three steps

procedure as fallows
ME41 - Creation of Quotation
ME47 - Maintain price
ME49 - Price Comparison

Outline Agreements

Quantity Contract ME31K

The overall value is specified in terms of the
total quantity of material to be supplied by the
vendor.

ME31L

ME38
a. Schema Groups: Vendor
b. Schema Groups for Purchasing Organizations
c. Assignment of Schema Group to Purchasing
Organization
MEK1
 Special Procurement
• Consignment
• Subcontracting
• Returnable Transport Packaging
• Pipeline Handling
• Stock Transfer Order

4032700295 999009635
Goods Receipt
Warehouse Consignment Stock
Stock Transfer to Store consignment
Stock=>Sales from Consignment Stock
(Payment)
Transfer posting to own stock (Payment) –
MB1B if some process to be done in-
house=>Transfer to Store for Sales

999009632

Subcontracting

800001234-Main Material
800001236-Child One
800001237-Child Two
4500000061-PO
2099-Goods Recevice of Chile Material
2101- MIGO-Goods Receive

Goods receive for child-800000111

CS01
5260000075
5260000076

ME21N

ME2O/MIGO

MIGO

MIRO Book the Invoice

MIR4 Display the doc
 Stock Transport Order

Transfer posting of material plant to plant by

one-step/ two-step method:-
1. This Process is done through
MIGO
2. We cannot maintain any conditions.
3. We can only transfer the goods.
4. This process is generally preferred when
plants are in same city or client doesn’t want to
monitor freight detail etc

• Service Master Record-AC03

• Service Purchase Order-ME21N

Inventory Management
1. Goods Receipt
2. Goods Issue
3. Transfer Posting

MIGO
101 – Goods receive through Purchase Order
102 – Reversal of GR

4032700339

107 – Goods receipt to valuated blocked stock.

109 – Goods receipt from valuated blocked
stock.

201- Consumption for cost center from pipeline

647-Stock Transfer Order (STO) Goods Issue
using VL02N for Outbound delivery
551 – Goods Issue for Scrapping

411-Transferred the vendor owned stock to

company (purchaser)
301 – Plant to Plant transfer in one step
303 & 305 – Plant to Plant transfer in two step

Movement Types
Note: Anything Cancellation will be +1 in most
cases (e.g. for 101 cancellation is 101
+ 1 = 102)
1. Create Physical Inventory – MI01
Monitor Stock Overview - MMBE
2. Enter count for Physical Inventory – MI04 List
of the Physical Inventory difference – MI20
3. Post Physical Inventory – MI07

999960362
2. Continuous Inventory
All materials are counted at some point in the
year, but that can be at any day appointed for.
So we can count some material in February,
others in April and so on. A single material can
be counted on a single date. This type of
inventory is mainly utilized in warehouse
management based warehouses, but it can be
done in inventory management too.
Note: In Continuous inventory we can
inventory Unrestricted, Quality Inspection &
block stock types.

1. Chart of Accounts--OB13, OX18 & OB62

2. Valuation Grouping Code--OX14, OMWM &
OMWD
3. Transaction/Event Key--OMWN
4. Account Grouping--OLMW
5. Valuation Class--OLMW & OBYC

1.Invoice
2.Subsequent Debit
3.Credit Memo
4.Subsequent Credit
 PATH
SPRO--SAP Reference IMG--
Enterprise Structure--Defination--Financial Accounting--
Edit,Copy,Delete, check Company Code
SAP landscape: Development –> Quality –> Production
Development system has two clients. 100 – Golden client and 110
Quality system has two clients. 200 – Test client and 210 – User
testing.
Production system-300 Production system has one client where we
book business transaction of day-to-day activities

SPRO--SAP Reference IMG--

Enterprise Structure--Defination--Financial Accounting--Define
Company

SPRO--SAP Reference IMG--

Enterprise Structure--Defination--Financial Accounting--
Edit,Copy,Delete, check Company Code

SPRO--SAP Reference IMG-- ->Enterprise Structure->Assignment-

>Financial Accounting->Assign Company Code to Company

SPRO=>SAP Reference IMG => Enterprise Structure => Definition =>

Logistic General => Define, Copy, Delete check plant
SPRO=>SAP Reference IMG =>Enterprise Structure => Definition =>
Materials Management => Maintain Storage Location

SPRO=>SAP Reference IMG=>Enterprise Structure => Definition =>

Materials Management => Maintain Purchasing Organization

SPRO=>SAP Reference IMG=>Materials Management => Purchasing

=> Create Purchasing Group

Plant to Company code

Purchasing organization to company code
Purchasing organization to Plant
Standard purchasing organization to plant

SPRO=>SAP Reference IMG=>Enterprise Structure => Assignment

SPRO=>SAP Reference IMG=>Enterprise Structure => Assignment

=> Assign Plant to Company Code

SPRO=>SAP Reference IMG=>Enterprise Structure => Assignment

=> Materials Management => Assign Purchasing Organization to
Company Code

SPRO=>SAP Reference IMG=>Enterprise Structure => Assignment

=> Materials Management => Assign Purchasing organization to
Plant
Enterprise Structure => Assignment => Materials Management =>
Assign Standard Purchasing Organization to Plant

SPRO=>SAP Reference IMG => Logistics General >= Material Master

>= Basic Settings >= Material Types >= Define Attributes of Material
Types

IMG => Logistic General => Material Master => Basic Settings =>
Material Types => Define Number Range for Each material Type
 IMG => Logistic General => Material Master => Basic Settings =>
Material Types => Define Number Range for Each material Type

IMG => Logistic General => Material Master => Field Selection =>
Assign Fields to Field Selection Groups

SPRO=>SAP Reference IMG => Logistic General => Material Master

=> Settings for Key Fields => Define Material Groups

SAP Menu=> Logistics => Materials Management => Material

Master => Material => Create Material

Basic data 1&2

Purchasing
Accounting view
General data 1 & 2

SPRO=>SAP Reference IMG =>Logistic General => Business Partner

=> Vendors => Control => Define Account group and field
selectionvendor
SPRO=>SAP Reference IMG => Logistic General => Business Partner
=> Vendors => Control => Define Number Range for Vendor master
record

SPRO=>SAP Reference IMG => Logistic General => Business Partner

=> Vendors => Control => Define Number Range for Vendor master
record

SAP Menu => Logistics => Material Management => Purchasing =>
Master Data => Vendor => Central => Create

Standard: Standard info record has information on standard orders

orders include details of vendor and material. This info record will
include vendors price for supplying the particular material.
Subcontracting: Subcontracting info record has information on
subcontract orders. This info record will include price for
assembling the raw material that is supplied by the ordering party.
Pipeline: Pipeline info record has information on material that is
provided by vendor through pipes. For Example: like
water,electricity.
Consignment: Consignment info record has information on
material that is kept at ordering party premises. This info record
contains vendors price that is to be paid for withdrawing material
from consignment stock

Logistics => Material Management => Purchasing => Master Data

=> Info Record => Create
Logistics => Material Management => Purchasing => Master Data
=> Source List => Maintain
 SPRO=>SAP Reference IMG => Materials Management =>
Purchasing => Purchase Requisition => Define Number Ranges

SPRO=>SAP Reference IMG =>Materials Management =>

Purchasing => Purchase Requisition => Define Document Types

SPRO=>SAP Reference IMG =>Materials Management =>

Purchasing => Purchase Requisition => Define Screen Layout at
Document Level

Note: We cannot do both Release (Item & Header level) in one PR,
Only one is possible item or Overall release (Header).
PO is having Only Header level relase

SPRO=>SAP Reference IMG =>Materials Management =>

Purchasing => Purchase Requisition => Release Procedure=>
Procedure with Classification
 SPRO=>SAP Reference IMG =>Materials Management =>
Purchasing => Purchase Requisition => Release Procedure=>
Procedure with Classification=> Edit Characteristics
As we Know the Table Name for PR is CEBAN for release & for field
name we can get from ABAP dictionary database table T Code:
SE11

SPRO=>SAP Reference IMG =>Materials Management =>

Purchasing => Purchase Requisition => Release Procedure=>
Procedure with Classification=> Edit Class

SPRO=>SAP Reference IMG =>Materials Management =>

Purchasing => Purchase Requisition => Release Procedure=>
Procedure with Classification=> Set Up Procedure with
Classification

SPRO=>SAP Reference IMG =>Materials Management =>

Purchasing => Purchase Requisition => Release Procedure=>
Procedure with Classification=> Set Up Procedure with
Classification=> Release Group

SPRO=>SAP Reference IMG =>Materials Management =>

Purchasing => Purchase Requisition => Release Procedure=>
Procedure with Classification=> Set Up Procedure with
Classification=> Release Code

SPRO=>SAP Reference IMG =>Materials Management =>

Purchasing => Purchase Requisition => Release Procedure=>
Procedure with Classification=> Set Up Procedure with
Classification=> Release Indicator
 SPRO=>SAP Reference IMG =>Materials Management =>
Purchasing => Purchase Requisition => Release Procedure=>
Procedure with Classification=> Set Up Procedure with
Classification=> Release Strategy
Note: Without the approval of the approver(release code) we
cannot able to create the PO for the same. Therefore in order to
approve we use T Code: ME54N.

Note: We will take 3 vendors in this system & their respective

prices will be compared & will select one vendor from these by
comparing through system.

Value Contract
The overall value is specified in terms of the total amount to be
paid for that material to the vendor.
SPRO=> SAP Reference IMG=> Material Management= >
Purchasing=> Conditions=> Define Price Determination Process

SPRO=> SAP Reference IMG=> Material Management= >

Purchasing=> Conditions=> Define Price Determination Process=>
Define Calculation Schema

SPRO=> SAP Reference IMG=> Material Management= >

Purchasing=> Conditions=> Define Price Determination Process=>
Define Schema Group

SPRO=> SAP Reference IMG=> Material Management= >

Purchasing=> Conditions=> Define Price Determination Process=>
Define Schema Group=> Schema Groups: Vendor

SPRO=> SAP Reference IMG=> Material Management= >

Purchasing=> Conditions=> Define Price Determination Process=>
Define Schema Group=> Schema Groups for Purchasing
Organizations

SPRO=> SAP Reference IMG=> Material Management= >

Purchasing=> Conditions=> Define Price Determination Process=>
Define Schema Group=> Assignment of Schema Group to
Purchasing Organization
SPRO=> SAP Reference IMG=> Material Management= >
Purchasing=> Conditions=> Define Price Determination Process=>
Define Schema Determination

SPRO=> SAP Reference IMG=> Material Management= >

Purchasing=> Conditions=> Define Price Determination Process=>
Maintain Condition Table
We can create the Condition Table from 501 to 999 as before 501
uses by SAP system.

SPRO=> SAP Reference IMG=> Material Management= >

Purchasing=> Conditions=> Define Price Determination Process=>
Define Access Sequences

SPRO=> SAP Reference IMG=> Material Management= >

Purchasing=> Conditions=> Define Price Determination Process=>
Define Condition Types

Logistics=> Materials Management=> Purchasing => Master Data =>

Conditions =>Other => Create

Note: We can assign the Condition value in Condition table fields

only when the Condition Type is assigned with the Access
Sequence.

SPRO=> SAP Reference IMG=> Material Management= >

Purchasing=> Conditions=> Define Price Determination Process=>
Define Calculation Schema
 1707980032-PIR
9999004011-PIR 4032700422-PO
4032700339-PO 999960032-MIGO
2025--MIGO 999960034--Goods
2027--Goods movement to own stock Movement

1. Create Purchase info record for Vendor/Material combination –

ME11
(We have to create material master in MRP2 special procure type
– optional)
2. Create PO Item Category K – ME21N
3. Post Goods Receipt in MIGO Transaction.
Referring the flow chart after this step we have two options either
sale from consignment stock or Transfer Posting to own stock.
If we want to transfer posting to own stock then we have to
proceed by
4. Transfer Posting from Consignment to own Stock – MB1B(411
K)
5. Create Invoice using MRKO Transaction

1. Create Subcontracting info record (optional) – ME11

& Create BOM – CS01
2. Create Subcontracting PO (Item category L) – ME21N
3. Receive a component material in same plant and Location,
before issue to vendor- MB1C(521)
4. Create transfer posting to issue the Sub components – ME2O
5. Goods Receipt for finished product – MIGO
6. Invoice Receipt for the services performed – MIRO
Now we will observe the movement type for the for the sub
assembly part which provided to the vendor using T Code: MB51

Problem: Suppose we have a scenario such that in Subcontracting

process we had given raw material A of 100 kg to make finish
product B, But when the Vendor Supply the Product B it consumes
95kg and remaining 5kg occur as rejection from the vendor. The
5kg rejected material can be sent to scrap, so how to manage in the
system?

1. Create Material for Returnable Packaging - MM01

2. Create PO for Material which Returnable Packing material to be
used – ME21N
3. Create Goods Receipt for Material with including Returnable
packaging – MIGO
4. Return the Packaging material back to vendor - MIGO(502)
5. Invoice verification – MIRO
1. Create a Material Master for Pipeline Material Type (PIPE) –
MM01
2. Create PIR of Category Pipeline (Provided Vendor) – ME11
3. Create Goods Issue Using Movement Type 201 P – MIGO
4. Create Invoice - MRKO

Stock Transfer Order

1. This process is done through T Code: ME21N by selecting the
Document type as UB.
2. Separate Pricing procedure is available for STO.
3. Through STO delivery & billing can be done.
4. This process is generally preferred when client has plants in
different cities or states and when client requires to monitor details
like tax related ,
conditions related etc.
Note: Instead of 102 movement type is normally done when some
error is done while posting the GR. In case if we have to return
some material due to some quality issue to vendor we can have
122 movement type.

Note: We can do the transfer posting from one Storage location to

another Storage location using 311 – one Step & 313-315 – Two
steps. The process is similar to the above plant to plant transfer.
 2XX Series for Goods Issue
Movement Type Description
201 Goods issue for a cost center
221 Goods issue for a project
251 Goods issue for sale (without sales order)
261 Goods issue for an order
281 Goods issue for a network
291 Goods issue for any account assignment

5XX Series for Special GR/GI

Movement Type Description
501 Goods receipt without purchase order : unrestricted-use stock
503 Goods receipt without purchase order : stock in quality
inspection
505 Goods receipt without purchase order : blocked stock
521 Goods receipt without order : unrestricted-use stock
523 Goods receipt without order : inspection stock
525 Goods receipt without order : blocked stock
531 Goods receipt of by-products from order
541 Transfer of unrestricted-use stock to subcontracting stock

543 Consumption from subcontracting stock

545 Goods receipt of by-products from subcontracting
551 Scrapping from unrestricted-use stock
553 Scrapping from inspection stock
555 Scrapping from blocked stock
557 Issue from stock in transit (adjustment posting)
561 Initial entry of stock balances : unrestricted-use stock
563 Initial entry of stock balances : quality inspection
565 Initial entry of stock balances : blocked stock

6XX Series for Sales

Movement Type Description
601 Goods issue for delivery
603 Goods issue for a stock transport order (shipping) with
additional item
605 Goods receipt for a stock transport order (shipping) with
additional item
641 Goods issue for a stock transport order (shipping)
643 Goods issue for a cross-company-code stock transport order
645 Goods issue for a cross-company-code stock transport order
performed in one step (shipping)
647 Goods issue for a stock transport order performed in one step
(shipping)

3. Cycle Counting
This type of inventory allows us to set a period for regular intervals
for physical inventory on the material level. So a fast moving and
high value material can be counted four times a year while slow
moving and low value material can be counted once a year. The
indicator for this is set in material master in the Plant/Storage
Location 1 View.
The Cycle counting only supports unrestricted stock type.
4. Inventory Sampling
Only a number of randomly selected materials are counted on the
balance sheet key date, and if those materials show small enough
differences, the other materials can also be considered to have a
correct stock level. Not really used that often, as it is essentially an
approximation, but in some cases it can be used if material and
warehouse structure imply that. High rate value items are normally
considered.

SPRO=> SAP Reference IMG=> Material Management= > Valuation

and account assignment=> Account Determination=> Account
Determination Without Wizard

SPRO=> SAP Reference IMG=> Material Management= > Valuation

and account assignment=> Split Valuation
1. Material Master purchasing view tick automatic PO check box.
2. Vendor Master purchasing view tick automatic PO check box.
3. Maintain Purchase Info Record.
4. Maintain Source list for Vendor & Material.
5. Create a Purchase Requisition.
6. Create automatic PO using T code: ME59N
 ME51N
Determination of Requriment PR(Internal Document)

F-53
Payment Done

000000005430000023-Desktop
000000005430000024-Ram- Sub Part

000000005430000025-HDD Sub
Part 2
000000005430000028--Mother
Board
PO-4032700258"

Goods receive for child-

4500000046
ME41 ME47 ME49
RFQ Maintain Quote Vendor Finalize

MIRO/FB60 MIGO ME21N

Invoice Verification Goods Receipt Purchase Order
PR-- Purchase Requisition DOA-Delegation of Authorities

PR-Header/Item Level

• Characteristics
• Class
• Release Group
• Release Code
• Release Indicator
• Release Strategy

Tcode-SE11
Master Table--CEBAN

BSART ZNB_PRDoc
EKGRP ZNB_PUGRP
WERKS ZNB_PLANT
GSWRT ZNB_HAMOUNT

ZNB_CLASS
ZN
• Characteristics
• Class
• Release Group
• Release Code
• Release Indicator
• Release Strategy

Master Table--CEBAN
Tcode-SE11

BSART--Doc Type
WERKS-Palnt
EKGRP-Purchase Group
GSWRT-Item Value

ZZNB_CLASS
LK
C1-Manager
C2-Genereal Manager
C3-Procurement Head
C4-CFO
C5-CEO

0 to 100000 C1 & C2
100001 to 500000 C1&C2&C3&C4

Parameter---Match Release should be triggerd

Plant/PR Doc Type/Purchase Group/Material Group/Amount

1000/ZZNB/001/1001/0 to 100000

Approval
1000/ZZNB/001/ 0 to 100000 Sandeep
1000/ZZNB/001/ 100001 to 500000 Pramod
1000/ZZNB/001/500001 to1000000 Ranjeet
1000/ZZNB/001/ 1000001 to 99999999 PK

DOA-- Delgation Of Authorities

ZZNB_DOCType
ZZNB_Plant
ZZNB_PG
ZZNB_ITValue
hould be triggerd

Manager
V.P
Procurement Head
CFO
 Tax Code 1 Tax Code 2 Tax Code 3

Country (IN) Tax Procedure

Condition Type 1

Condition Type 2

1-Create Condition Type-OBQ1

2-Create Accounting Key-OBCN
3-Define Tax Procedure-OBQ3
4-Assign Tax Procedure with Country-OBBG
5-Create Tax Code-FTXP
6-Create G/L FS00
7-Account Determine, assign G/L with Account Key- OB40
8- Create Entry -FB60

TAXSUN BAST
BSCG
ZCST

2501TX BASB
G151
G152
 Accounting Key G/L

Accounting Key G/L

IGGS-Input IGST IGG- Input 9 % IGST

CGGS-Input CGST CGS- Input 9 %
SGGS-Input SGST SGS- Input 9 %

INTTAX

@SG 1003
@CS 1004

G51
G52