Introduction SAP R/3 – MM

Dr. Djamal Ziani
King Saud University

ERP-Software: SAP R/3
Sales and








Client / Server







Components of Materials


it is a critical factor in how the company will be structured 4 .Organizational Data • A hierarchy in which the organizational units in an enterprise are arranged according to tasks and functions • Are static data and are rarely changed • The definition of organization units is a fundamental step.

Organizational Structures .

Organizational Structures • • • • • • • Client Company Plant Valuation Area Storage Locations Purchasing Organizations Purchasing Groups 6 .

the client represents a corporate group. • From a business viewpoint.Organizational Structures: Client • The client is a unit within an SAP R/3 system that is self-contained both in legal and organizational terms and in terms of data. for example. • Client: 3 numerical digits . with separate master records and an independent set of tables.

selfcontained bookkeeping system can be replicated. for example. • A company code represents an independent unit producing its own balance sheet. a company within a corporate group (client). • Company code = 4 characters .Organizational Structures: Company & Company code • The company code is the smallest organizational unit of external accounting for which a complete.

a distribution center or centralized warehouse • May be a physical or logical unit 9 .Organizational Structures: Plant • Lowest valuation area • Organizational level where Material Requirements (MRP) runs • Generally used to describe a production site.

Organizational Structures: Valuation Area • The valuation area determines at which level a material is valuated (inventory value is established) • SAP R/3 allows valuation at the company code or plant level. but recommends valuation area be set at the plant level. • Means each plant can have its own material prices and account determination 10 .

Organizational Structures: Storage Location • Subdivision of a plant • Where materials are managed (inventory management) – Raw Materials – Maintenance. and Other (MRO) – Finished Product • May be a physical or logical unit 11 . Repair.

.Organizational Structures: Purchasing Organizations • An organizational unit responsible for procuring materials or services for one or more plants and for negotiating general conditions of purchase with vendors. • The purchasing organization assumes legal responsibility for all external purchase transactions.

8. 5 purchasing group MG 6 plant purchasing group MG 7. 3 purchasing group MG 1. 4 purchasing group MG 2. 9 .Purchasing organization material group purchasing organization purchasing group MG 0.

A purchasing group can also act for several purchasing organizations. . which are responsible for day-to-day buying activities.Organizational Structures: Purchasing Organization Groups •The purchasing organization is further subdivided into purchasing groups (buyer groups).

inc. client company code 0001 – Jones inc.Inventory Management with a Warehouse Management System 0001 0001 –– ABC ABC inc. purchasing organization plant distrib. 0003 0003 0004 0004 0003 0003 0001 0001 MM factory 0004 0004 001 001 001 001 WM 002 002 05-04-03 05-04-03 05-04-04 05-04-04 .0001 center 0001 storage location 0001 0001 0001 0001 0002 0002 0002 0002 0003 0003 0002 0002 warehouse number storage type storage bin (physical stock) 0002 – Model Ltd.

The Module MM – Main Functions .

purchasing requirements plan. inventory mgmt. QM quality management FI financial acc.MM – interdependencies to other modules Logistik PP production planning MM material master SD sales and distrib. invoice verification CO controlling PM plant maintenance AM fixed assets mgmt. .

prices / terms and conditions • bills of material for – – – – production planning purchasing sales and distribution withdrawal of Material .Basic Data • Master records . material and services to be procured 3. the relation between 1.include information about 1. and 2. vendors 2. (purchasing info record) e.g.

order handling  accounting data • bank account • acc.Structure of the Vendor Master Record sections utilization area of validity  General data • name • address • control data client wide  purchasing • terms and cond. • partner functions • currency • • • request for quotation quotation processing purch. maintenance • payment • • • invoice entry invoice verification payment handling for each purchasing organization client wide or for each company code .

You create a German vendor in company code 1000. If. to create purchase orders and invoices denominated in euros. it could be that the order currency has already been changed and this IDES scenario may no longer work.Create a Vendor Creating Your Own Vendor Master Record  Usage We recommend that you create your own vendor master record for this scenario. you prefer to use the reference vendor instead. however. . IDES AG Germany.

Call up the transaction as follows: Menu Path Logistics  Materials Management  Purchasing  Master Data  Vendor  Central  Create Transaction Code XK01 .Create a Vendor Procedure 1.

Create a vendor On the Create Vendor: Initial Screen. enter the following data: Field Data Vendor Your own vendor (choose a number between 1000 and 1999) Company code 1000 Purch.. organization 1000 Account group LIEF Reference vendor 1080 Reference company code 1000 Reference purchasing organization 1000 .

enter the following data: Field Data Description Any Search term Any. numerical (any) Country DE Language DE . for example "euro" Street/House number Any Postal code/City 5-figure.Create a Vendor On the Create Vendor: Address screen.

Choose appears. Choose appears. until the Create Vendor: Purchasing Data screen 3. until the Create Vendor: Partner Functions screen . Choose appears. Choose until you reach the Create Vendor: Accounting and make sure that 160000 appears in the Reconciliation Account 160000 field. check that the order currency is EUR. Choose appears. 4. until the Create Vendor: Partner Functions screen 6. On the Create Vendor: Purchasing Data screen. until the Create Vendor: Partner Functions screen 5.Create a Vendor 1. 2.

Create a Vendor .

Create a Vendor .

Create a Vendor .

und calculation-specific information requirements planning: information about material requirements planning (e.. g. g. material movements. .Views on the Material Master each view is maintained by Record a certain user department of the firm        accounting: valuation. reorder point) purchasing: e. forecast: information about the forecasting of the material requirements S & D: informationen about sales orders and price determination . order unit engineering: technical information storage: information about warehousing. responsible purchasing group..

Demo: Create Material Master .

Demo: Create Material Master •Select the views: Basic data 1. Purchase Order text. Accounting 1 . Purchasing. Gl. Plant Data/Storage 1.

Demo: Create Material Master .

Demo: Create Material Master .

Demo: Create Material Master .

Demo: Create Material Master .

Demo: Create Material Master .

Demo: Create Material Master SAVE .

purchasing info record info record prices terms & cond. PO statistics tolerance levels date quotation outline agreement order .

MM X outline agreem. X determination: source of supply vendor vendor22 vendor vendor11 PO PO PO PO monitoring purchase order processing ? vendor selection .Purchasing Process PO ? = invoice X X X invoice verification X X determination: requirements vendor X X X goods received & inventory mgmt.

Create Purchase Order (PO) vendor vendor22 purch. 2 vendor not known source list purch. order . purch. order outline agrement info record vendor 3 assigned purchase requisition exists (from user department) vendor vendor22 purch. order 1 vendor known terms & cond. req.

Purchasing Process • Create a requisition • First release of requisition • Create RFQ (Request for Quotation) with reference to requisition • Create PO (Purchase Order) with reference to RFQ • Department receives material ordered (GR) • Department pays invoice (MIRO). .

and the timeframe. It may also contain the authorization to proceed with the purchase. .Purchase Requisition Document generated by a user department or storeroom-personnel to notify the purchasing department of items it needs to order. Also called purchase request or requisition. their quantity.

Request for Quotation Is a standard business process whose purpose is to invite suppliers into a bidding process to bid on specific products or services. RFQ generally means the same thing as IFB (Invitation For Bid) .

.Purchase Order Buyer-generated document that authorizes a purchase transaction. prices. discounts. other associated terms and conditions. It sets forth the descriptions. quantities. and identifies a specific seller. date of performance or shipment. payment terms.

Create Purchase Requisition .

Create Purchase Requisition .

Plant= 1000.Create Purchase Requisition • In the item. enter your material. QT = 100 .

Create Purchase Requisition • Save your Purchase requisition • Take note of Purchase requisition number .

Demo: Create Purchase Order .

your purchase requisition will be copied to the purchase order (or you can drag and drop it into the shopping cart) .Demo: Create Purchase Order • Open document overview: Click on document overview button • Choose “Selection variant list” icon •Then select “My purchase requisition”. you will get your purchase requisition listed •Click on “adopt” icon.

Demo: Create Purchase

Demo: Create Purchase

• Enter your vendor, and price 30 euro and save

Posting an Order Entry (Goods


purchasing req. planning

sales and

goods receipt
inventory mgmt.
goods issue.


financial acc.






fixed assets mgmt.

Hit "Enter" . 5. Enter PO number for goods to be received. Select Goods Receipt 3.Demo: Posting Order Entry (Goods Received) 1. Use T_code : MIGO 2. Select Purchase Order 4.

8. Enter Document date & posting date 7. . Enter Header text (comment) if necessary. Close detail data.Demo: Posting Order Entry (Goods Received) 6.

then Check the "OK" box for first line item. If you only received first item.therefore. the second item need not be processed .Demo: Posting Order Entry (Goods Received) 9. Notice that movement data is "101" 10.

If you only received 3 pcs out of 10 pcs of item one & 2 pcs out of 10 pcs of item two. Input actual quantity (3 & 2 pcs ).Demo: Posting Order Entry (Goods Received) 11. Hit "Enter" . then Check the "OK" box for both line item 12. 13.

15. . Red means error . Check the "status" column . Yellow means Warning .Demo: Posting Order Entry (Goods Received) 14. Click "Check" button to find out if there is any error. Green means OK .

invoice verification output information actions: • • • • enter invoice verify invoice post invoice update relevant data • (re-edit invoice) financial accounting asset management cost accounting .Invoice Verification input information orders goods receipt master data: material vendors accounts terms & cond.

and click on Enter. . to display the material details.Create Invoice Create Invoice using Tcode MIRO Enter the Required details in all Tabs Enter the Purchase order no.

) Click the check box..Create Invoice (contd. to calculate the Tax .

Create Invoice (contd..) Enter the Amount and click on save .

.) Invoice is created .Create Invoice (contd.

Demo: Invoice Verification Using the tcode: MIRO" .

Demo: Invoice Verification .

Demo: Invoice Verification net amount for positions .