Professional Documents
Culture Documents
MM Functional Overview
MM Functional Overview
Topics
Procurement
Inventory Management/
Valuation
Overview and Organizational Structure
Definition: Logistics
Capital resources
Logistics chain
Procurement Production Sales
Purchase orders Ware- Distributions Ware- Sales orders
materials house house products
services services
Vendor
Material resources Customer
Capacity resources
Overview of MM
Material requirements
planning
Goods Transfer B .
? issue posting
.
.
?
7 Invoice verification 1 Requirement determination
MM
Materials
Goods receipt and management
6 Source
inventory management 2
determination
Order
Controlling areas
Company codes
Valuation areas
Plants
Company Code
Client
Karachi Lahore
Plants
plant depot
Business area
0002
Purchasing Organization
Purchasing
0001 0002 0003
organizations
Purchasing group 1
Purchasing group 2
Purchasing organization 1
Purchasing organization 2
Purchasing
organization
Material number
Description
Units of measure
Technical data
Storage location-
specific data Forecast data
4 16 72
Valuation class
ROH 3000
3010
HALB 7920
HIBE 3000
Maintenance of material data
Price control
S V
Standard-
Moving average
price control:
price control:
Valuation of
Final delivered price
standard price
(such as purchase
from the material
order price) influences
master record
the valuation price
Purchasing Master Data
Purchasing Master Data
The Vendor
The vendor
Purchasing
Bank
purch
ase
order DEUTSCHE
MARK
DEUTSCHE
MARK
Payment DEUTSCHE
MARK
Vendor
Material Invoice
order account
?
=
General data
Company code
Vendor master record
General data
Valid
Address for the whole group
Communication
Purchasing data
Valid
Order currency for one purchasing
Incoterms organization
Minimum order value
Accounting data
Valid
Bank data for the whole group or
Payment transactions for one company code
Account management
Account group
One-time
account
Account group
You
Vendor
Invoice
Enter invoice
Info record
Consumable
material M2
Info record
Vendor data
Origin data
Order unit
Price history
Purchasing statistics
Changes
Pricing
11 Purchase order
Pricing procedure RM000 Vendor 123
Purchasing organization 2000
Pricing procedure
Condition type
Net price:
Fixed freight FRA1
charge + Calculation type
Scale basis
Effective price: Price/quantity
scale
Purchasing Master Data
Source List
Source list
Source list
Vendor 1 allowed Vendor 1 fixed
Vendor 2 allowed
Material M1 Vendor 3 allowed
Plant 0001
Procurement
Procurement
Procurement Environment
External procurement environment
Source list Requirements RFQs
determination
Purchase
Quotations
Quota requisition
arrangement
Source Piece
Piece
Outline determination %%
agreement Conditions
Conditions
Vendor
selection USD
USD
Info record
Purchase
order
history
Purchase
Invoice
order
receipt
Goods receipt
Purchasing documents
Purchase
requisition
RFQ
Quotation Quotation
Purch.order
31. 1.
Contract
Scheduling
Release order agreement
Structure of a purchasing document
Purchasing
document ocument
Document
ocumentheader
General
General data
data
statistics
statistics
Messages
Messages
Conditions
Conditions
Additional
Item 1 data for item 1
General data Purchase
Conditions order history
Texts
...
Schedule line
Item 2 Additional
data for item 2
...
...
Item category
Purchasing
document A B C
Item Acct.assign.
type type
Procurement for stock
Purchasing
document(s)
Item:
no account Warehouse
assignment
Goods
category
receipt
Goods
issue
Material
Production
Vendor
Procurement for consumption
Purchasing
document(s)
Item:
with account
assignment
category
Goods
receipt Production
Vendor
Material
Procurement
Consumption-driven MRP
Consumption-driven MRP
Requirements
planning
A
Forecasting Lot sizing Material
Inventory
Purchasing management
Materials planning and control procedures
Requirements
planning
VM, VB VV
Reorder point
Stochastic
procedure
Stock level Consumption
Time Time
Reorder Point Procedure
Stock Lot size
Reorder level
Safety stock
Replenishment
lead time
Net Requirements Calculation in the Reorder Point
Procedure
Shortage
Purchase order proposal
to the amount of
the lot size
Reorder level
Purchase order
Fixed planned
Comparison
Comparison
orders
Fixed purchase
requisition
Warehouse stock
Safety Stock and Reorder Level
Stock
Reorder
Daily level
x Replenishment
lead time
Safety stock
Replenishment
lead time
Time
Service level Replenishment
lead time
MAD
Net Requirements Calculation in Forecast
Based Plng.
Shortage
Lot size
Forecast requirements
Fixed inward movements
e.g. purchase orders
Replenish to
maximum stock
Periodic level
Lot sizing procedures
procedure
Optimum
procedure
Time
Planned warehouse stock =
Fixed lot size
Replenish to
maximum stock level
Periodic Lot-sizing Procedures
Quantity
Time
Period length Period length
Inward
movements
Outward
movements
Dynamic Planning Calculation
Price : $ 20
Lot fixed costs: $ 100
Storage costs percentage : 10 %
Optimum
Part Period Balancing
Price : $ 20
Lot fixed costs: $ 100
Storage costs percentage : 10 %
Optimum
Least Unit Cost Procedure
Req. x Price x Storage costs x Time in storage
Storage costs =
100 x 365
Price : $ 20
Lot fixed costs : $ 100
Storage costs percentage : 10 %
Optimum
Scheduling in the case of external
procurement
Forward scheduling
11 22
Replenishment lead time GR processing time
t
Today + 1 Purch. order MRP
delivery date delivery date
Backward scheduling
22 11
Replenishment lead time GR processing time
t
Start / Purch.order MRP
release date delivery date delivery date
The requirements planning process
Planning mark-out
Process
relevant to 31. 1.
MRP
Order
Material requirements
planning
MRP
Planned order
Opening period of
materials planning/
control
Purchasing Purchase
requisition
Purpose of the forecast
A
Material
MRP type
VM VV
Forecast Forecast
Reorder level
Forecast requirements
Safety stock
Procurement
Processing Purchase Requisitions
Purchase requisition
Department
MRP
Requisition Requisition
Purchasing
Purchase requisition processing
MRP Direct entry
Purchase requisition
Vendor
o.k.
RFQ Purchase
order Release
Release
order
? order
Procurement
Processing Vendor Inquiry / Quotations
Request for quotation/ quotation
RFQ 1 RFQ 2
Requirements known.
Procure from which ?
source?
Vendor 1 Vendor 2
Quotation 1 Quotation 2
Purchase Rejection
order
Entering an RFQ
11 22
Item list
Vendor 1 Inquiry 1
Vendor 2 Inquiry 2
?
Issuing output
Purchasing
document
Output
Printer EDI Fax
Reminder Rejection
Reprint Order
acknowledge-
ment check
Processing Quotations: Example
11 Enter price and pricing conditions
Price
Pcs
Pcs
Vendor Order history
Purchase
%
%
order
Conditions
Conditions
One-time vendor $$
Info record
Contract
Contract Reference Reference Purchase
request RFQ contract requisition
11 22
Vendor
Scheduling Agreements
Purchase RFQ Reference Purchase
scheduling
requisition agreement requisition
Scheduling Einstellungen
Einstellungen
agreement Schedule lines
11 Vendor
22
PROCUREMENT OF EXTERNAL SERVICES
Inventory Management/Valuation
Inventory Management
Goods Movements
Inventory management
Old system Vendor In-house
production
Goods receipt
Transfer posting
Warehouse 1 Warehouse 2
Goods issue
Consumption
Scrapping
Documents for goods movements
Warehouse
A
Material
Goods movement
Material
document Accounting
document
Material Valuation Levels
Material valuation levels
0001
Valuation area
Split Valuation: Structure
Valuation
Valuation area 0001
Plant 0001 Material 1
Material 1 Valuation category H
Plant
Quantity 100
Mvg. av. price 5.20
Batch
Italy France Italy France
Quantity 10 Quantity 20 Quantity 30 Quantity 40
Updating the stock situation
Stock situation
Account determination
Consumption update
Field selection
Analyses in inventory management
Analyses
ABC-Analyses
Stock per material
Slow-moving items/
Warehouse stock list inventory turnover
Standard analyses
Inventory Management
Processing Goods Receipts with Purchase Order Reference
Purchase Order Views in Inventory
Management
Purchase order
Header $ Conditions
Statistics Vendor Conditions
Texts Output
General
Items 01/01/95
Schedule
10/01/95
Purchase order lines
30/03/95
history
Texts
Determining the purchase order during GR
Manual
Purchase Matchcode
Manuell
order
List of open purchase orders by
- vendor
- material
- delivery plant
Stock types for goods receipt
Goods receipt blocked stock
Unrestricted-use stock
Warehouse
Stock in quality inspection
Co
Vendor ns Blocked stock
um
pt
ion
Stock account
Stock value GR/IR clearing
Price differences
( ) ( )
Preplanning
Goods receipt
Miscellaneous
Stock transfer
transfer postings
Stock
Stock plant
plant 01 Expense
Expense // revenue
revenue Stock
01 from
from stock
stock transfer
transfer Stock plant
plant 02
02
(( aa )) 200.00
200.00 100.00
100.00 300.00
300.00
(( bb )) 200.00
200.00 200.00
200.00
Inventory Management
Processing Goods Issues
Goods issues
From warehouse
Goods issue
From consignment
stores
Consumption Issue
Asset Scrap
Sales
Order
Effects of goods issue
Material document Stock quantity
Consumption statistics
Accounting document ...
Point of consumption:
G/L account.
Cost center
Stock account
Order
Consumption account
...
...
Goods issue
Warehouse mgmt:
Reservation Transfer order
Stock account
Stock value Consumption account
Consignment
Subcontracting
Stock Transfer with Stock Transport Order
Third party processing
Returnable Transport Packaging
Pipeline handling
Sales order stock
Project Stock
Company’s Own Special Stock
Stock of material provided to Vendor
Consignment stock at Customer
Returnable packaging stock at Customer
Company’s Own Special Stock
Managed at plant level Stock types
Unrestricted use stock
Quality inspection stock
Externally-Owned Special Stocks
Vendor Consignment
Returnable Transport Packaging
Sales order stock
Project Stock
Externally-Owned Special Stocks
Managed at Storage Stock Types
location level Unrestricted Use
stock
Quality inspection
Stock
Blocked stock
Inventory Management
Physical Inventory
Physical Inventory Procedures
Periodic inventory
Continuous inventory
Cycle counting
Inventory sampling
Physical Inventory
Can be carried out for Company’s own stock and
Special Stock
3
Print physical
inventory
document
Physical 4
inventory document
Arrange 5a
5 recount
List of
differences Change 5b
count
6
Post differences
Invoice Verification / Valuation
Types of invoice verification
or or
Purchase
order
Purchase Vendor
order invoice
Goods receipt
Invoice verification
?
Invoice verification environment
Purchase
order
G/L accounts
Assets
Invoice Invoice
---- verification document
Cost centers
Goods receipt
Vendor master
Material master
Conditions
Posting an invoice
Invoice
relating to
purchase
order GR/R account
Post
Vendor account
A B
XX XX
Purchase Invoice
order Price
$5 at $6
Invoice
10 pieces = 250 g
Goods receipt Order
10
10 pcs
pcs == 200g
200g price quantity
Purchase Invoice
order = 2 kg = 2.5 kg
10 pieces
10 pieces at
$20/kg
Purchase Invoice
order Date
Planned
delivery date 04/12/95 26/11/95
Tax
Company Material value
KMT
Purchases A A
Vendor Customer
Tax payable
Tax office
Invoice receipt postings
Vendor
GR/R clearing Input VAT (control acct.)
Stock account
Stock value Price differences
( ) ( ) ( ) ( )
Postings at Standard Price
Stock account GR / IR clearing account
(2) 200.00
(3) 240.00 240.00 (2)
SD
SD FI
FI
MM
MM CO
CO
PP
PP R/3- AM
AM
Client/Server
QA
QA
PM
ABAP/4 WF PS
PS
PM WF
HR
HR IS
IS
MM SD
Non-Movement Type
based Transactions
Grouping Organizational Levels for Account Determination
Case: valuation area = plant
Valuation
grouping Plant Company code Chart of accounts
code
0004
FERT
0001 7900
HALB
HAWA 0002 3000
. 3010
. 3020
. 3030
ROH1 0003 3040
ROH2 3100
0004
ROH3 3200
...
Grouping of Materials for Account Determination
Option 1: Option 2 Option 3
HIBE HIBE
Acct.
Acct. 22
Mat 3 Mat 3
Mat 4 Mat 4
FERT FERT
Acct.
Acct. 33 Acct.
Acct. 33
Mat 5 Mat 5
Mat 6 Mat 6
Procedure Part 1: Value String - Processing Keys
Transaction
Value String
(Generalized
posting record)
BSX
BSX WRX
WRX KBS
KBS
Processing keys
300100
300100 191100
191100 425000
425000
G/L account number
Procedure Part 2: Processing Key - Rules
1
Processing keys
Transaction
for debit/credit posting
Rules specify
account determination
key
Account Determination Procedure: Overview
Type of Material
Transaction Plant
Master
Movement Non-move-
"Type of
type based ment type based
Transaction Transaction
Material"
Material
Step 1 or 2
Type
Value Qty.
Posting String Posting String
Account
Company Code
Categ. Reference
Step 3
Rules
Processing
Key (GBB) Account Valuation Val. Grouping
modification Class Code
Processing
Key (AUF)
Chart of
Step 4
Account
Legend
Information derived from Transaction type G/L Account
Information derived from Material Master
Information derived from the organiz. Structure
Main Customizing area
Automatic Posting: Maintenance of the Settings
1
Selection of the
valuation grouping code
2
Selection of the posting transaction
3
Allocation of the G/L account number(s)
per valuation class
(and account grouping code)