SAP – MM Overview

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 .Material Master views Material master contains entire information about the material related all the departments of an organization.

order Invoice Goods Supplier Goods receipt ? = Invoice verification . Purchase order Order Recipient Payment Payee Vendor Material Invoice Invoicing Party Purc.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.

MM Module Data flow Purchase order Invoice 1 Determine Requirements 7 Invoice verification Plan Rqmts. MM 6 Goods receipt and inventory management Materials mgmt 2 Source determination 5 Order follow-up Purchase order 3 4 Order processing Vendor selection .

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

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

Purchase Requisition: PR is the request for Material and services. 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 . It is the first trigger to the buyer to arrange for procurement. • • It is generated automatically or manually.

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

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. Order history Transfer Order . 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.

Reporting.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. and Analysis  Payment will then be made later based upon the ‘open’ invoices posted on the system .

and vendor master files. inventory management. 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 .Invoice Verification Environment • Invoice verification accesses data from purchasing. material master.

(Payment runs can be automated to occur at specific times. NY 10181 1449 Date _______________ Pay to: ________________________________________ ________________________________________________________ _______________ _________________ 12930 39040 2020 20202 10923 1449 Released Invoice .Vendor Payment • Accounts payable reads the invoice file and pays all posted invoices due.) Vendor Bank Payment Payment program program 1000 Financial Accounting 1000 Motor Sports International 1234 Main Street New York.

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