Materials Management –

An Overview

1
Agenda

Objective & Overview

Organisation Structure

Master Data Overview

Purchasing documents

Standard Procurement Processes

2
Objective

 Provide a general overview of the Materials

Management(MM) module
 Overview of the Organization structure relevant to
MM
 Understand which Master Data is relevant to
Materials Management

3
Overview

 The MM Module is aimed at managing procurement

and receipt of Materials and Services.
 MM Module also involves Storage,
Movment,Valuation, &Consumption of materials

4
MM Organization Structure

Client

Company code 1 Company code 2

Plant 1 Plant 2
Purchasing
Organization

Storage Storage
location 1 location 2
Plant 3 Plant 4

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 Purchasing Organization

Purchasing organization can be for

 Central Purchasing
 Local Purchasing

Client

Company Code

Purchasing Purchasing
Organization 1 Organization 2

6
SAP MM Process Cycle

7
 Master Data
 Material Master
 Vendor Master
 Purchase Info record
 Source list

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Material Master

Material
Material Views
type

Raw Material Purchasing

Internal number Semi-finished Sales

assignment Finished product Accounting

External number Pipe line material MRP

assignment Trading goods Warehouse
etc. etc.

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Vendor Master

General data
Account number
Description/address
Supply region

Purchasing organization
Accounting data data
Reconciliation account Partner roles
Terms of payment Schema group
Bank details Purchase order currency

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Purchasing info Record

General data
Vendor data
Origin data
Order unit

Control data Prices and conditions

Delivery time Gross price
Minimum quantity Discounts
Tolerances Freight

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Source List

 Used to manage sources in

case some materials have
more than one possible
source
 When a requisition is 1.1.95 - 30.6.95 1.7.95 - 31.12.95
created manually or
through MRP,the system Source list Vendor 1 allowed Vendor 1 fixed

determines the correct

Vendor 2 allowed
Vendor 3 allowed

source. Material M1
The Source list contains the
Plant 0001

allowed, preferred,and /or
blocked sources of supply
for a material in a plant
that are valid within a
certain period.

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 Purchasing Documents
Definition:
A Purchasing Document is an instrument used by purchasing to procure
material or service.

Purchasing Documents

Purchase Scheduling
Purchase Order Quotation Contract
Requisition Agreement

•Document type.
•The relevant number range assigned internally or externally.

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Standard Procurement Processes

 Procurement for Stock

 Procurement for Consumption
 Procurement of External services
 .Subcontracting
 Third Party procurement
 Vendor Consignment
 Stock Transfer
 Return to vendor

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 Procurement for Stock
Purchasing
document(s)

Item:
no account SLOC
assignment
Goods
category
receipt

Goods
issue

Material
Production

Vendor

15
 Procurement for Consumption

Purchasing
document(s)

Item:
with account
assignment
category

Goods
receipt Production

Vendor

Material

16
Subcontracting process

17
Consignment process

18
Stock Transport order process

19
Stock Transport order process
Stock Transfer

Storage location to Company code to

Plant to plant
storage location company code

 Stock will be updated .  If plants belongs to  Accounting doc . will be

different valuation areas, created .
accounting doc. will be
 Stocks will be updated .
created , otherwise no .
 Stocks will be updated .

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 Third Party Procurement process

• Create a third Party Sales Order. This triggers a Purchase Requisition

automatically in the system. If no SD route is used third Party Requisition can be
manually created in the system.

• Find source of supply and convert the PR to PO.

• Vendor confirms the shipment to customers. Post a statistical Goods Receipt in

SAP.

• Receive Vendor Invoice and make Invoice verification

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QUESTIONS!!!!

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Thank You !!!

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