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SAP MM Overview

Material Master views


Material master contains entire information about the material related all the departments of an organization.
Information related to different departments is stored through different views of material master. Views for material master are
Basic data Classification Sales views Purchasing MRP views Work scheduling Storage locations Warehouse data Quality Management data Accounting data Costing data

Vendor Master

`Vendor master contains all the information required to do business with a vendor. Information is shared between the accounting and purchasing departments. All data is grouped into three categories: General data Company code data Purchasing data

Bank

Purch.

Purchase order

Order Recipient

Payment

Payee

Vendor
Material

Invoice

Invoicing Party
Purc. order Invoice

Goods Supplier
Goods receipt

? =
Invoice verification

MM Module Data flow


Purchase order Invoice

Determine Requirements

Invoice verification

Plan Rqmts.

MM
6 Goods receipt and inventory management
Materials mgmt

Source determination

Order follow-up

Purchase order

3
4 Order processing

Vendor selection

MM Process
1. 2. 3. 4. 5. 6. 7. 8. MRP run triggers the requirements or Manual Requisitions Created. Purchase requisition is released. Vendor is selected. Prepare Purchase Order. Release Purchase Order. Follow up with vendor for supply. Goods Receipt. Receive Invoice and pay vendor.

What is MRP?
MRP stands for: Materials Requirements Planning.

The function of MRP is to provide material availability, that is, it is used to procure or produce the requirement quantities on time. This process involves the monitoring of stocks and demand, leading to the automatic creation of procurement proposals for purchasing or production. The main objective of MRP is to determine which material is required, the quantity required and by when it is required. MRP compares the requirements for end products with the current stocks and planned manufacturing orders. MRP then explodes the product BOMs to determine the dependent requirements for intermediate products and purchased raw materials. MRP can be run Daily / Weekly / Monthly, which is scheduled for automatic run. It can also be done manually.

Purchase Requisition: PR is the request for Material and services. It is the first trigger to
the buyer to arrange for procurement.
It is generated automatically or manually. Item category and account assignment are important in PR

or

Material Resource Planning

Direct Entry
Purchase Order Purchase Order Purchase Order

Purchase requisition

Release strategy

Purchase order

Determine source of supply

Purchase Order A purchase order is a formal request to a vendor to provide certain materials or services under specific conditions (quantity, price, delivery date, etc.) PO is the legal document. PO can be controlled with header level release procedure. Item category and account assignment are important in PO like PR.

Purchase
Requisition

Purchase Order

Goods Receipt

Invoice Posting

Planning, Reporting, and Analysis

Purchase Order Processing


Purchase Purchase Order Order Direct Entry or Purchase Requisition
Purchase Order Purchase Order Purchase Req.

Standard Standard Sub contract Sub contract Consignment Consignment Third-party Third-party

Statistics Order History

Stock material Consumable material Service

Account assignment
(cost center, asset, project)

Scheduling agreement
It specifies Order quantity Price specific period to supply There is a delivery schedule for each scheduling agreement Helps to reduce paper work

Results of a Goods Receipt Posting


Transaction documents are created both for materials management and finance.

Accounting document G/L accounts: Consumption account GR/IR account Material document Stock quantity Consumption statistics

Goods Receipt Posting

Point of consumption Cost center Order

Purchasing data: Order item, Order history

Transfer Order

Invoice Processing
This last step in the procurement process includes invoice verification and updating accounts payable in the FI module.

Purchase
Requisition

Purchase Order

Goods Receipt

Invoice Posting

Planning, Reporting, and Analysis

Payment will then be made later based upon the open invoices posted on the system

Invoice Verification Environment


Invoice verification accesses data from purchasing, inventory management, material master, and vendor master files.

G/L accounts
Purchase Order

Assets
Purchase Order Purchase Order

Cost centers
Vendor Invoice

Projects Invoice verification Orders

Goods Receipt Material master Vendor master

Posting an invoice in the R/3 System Posting an invoice in the R/3 System updates purchasing and accounting data updates purchasing and accounting data

Vendor Payment
Accounts payable reads the invoice file and pays all posted invoices due. (Payment runs can be automated to occur at specific times.)

Vendor

Bank Payment Payment program program


1000

Financial Accounting

1000

Motor Sports International


1234 Main Street New York, NY 10181

1449
Date _______________

Pay to: ________________________________________ ________________________________________________________ _______________ _________________ 12930 39040 2020 20202 10923 1449

Released Invoice