SAP MM Notes

12 /07/2012
MM – Enterprise Structure – Master Data – Purchasing – Inventory
Topics to be covered: Enterprise Structure: Company – Company Code – Plant – Storage Location
Master Data: 1. Material Master
2. Vendor Master
3. PIR (Purchasing Info Record)
4. Source List
5. Quota Assessment
6. Messages (to take printout of reports)
7. Conditions on Pricing
Purchasing: 1. Purchase Requisition

2. Request for Quotation (RFQ)
3. Quotations
4. Price Comparison
5. Purchase Order
6. Contract (Quantity & Value)
7. Scheduling Agent
8. Optimization of Purchase Order
9. Release Procedure
10. Customization of Purchasing
Inventory
Management: 1. Introduction
2. Goods Receipt
3. Goods Issue
4. Stock Transfer
5. Transfer Posting
6. Reservations
7. Physical Inventory Process
Others: 1. Subcontracting Process

2. Consignment Process
3. Indirect Purchasing
4. Purchase of Services
5. Blanket Purchase Order
6. 3rd Party Process
7. Sales Order Stock (Made To Order)
8. Stock Transport Order
9. Pricing Procedure
10. Output Determination for Pricing
11. Split Validation (for Stock Pricing)
12. Batch Management
13. Integration of MM with FI/CO
14. Integration of MM with SD
15. Material Requirement Planning (PP)
16. Invoice Verification
17. LSMW (Legacy System Migration Work)
18. ABAP
19. ASAP
13/07/2012
INTRODUCTION TO ERP & SAP:
ERP (Enterprise Resource Planning) is a methodology to automate a company's
processes. Advantages are:
1. Increases operational efficiency.
2. Get accurate reports on various functional activities.
3. Highly secured system.
4. Planning tool to utilize resources to the maximum extent.
SAP, Oracle Applications, JD Edwards, PeopleSoft, Microsoft Dynamics, RAMCO,
BAAN, Tally are some types of ERP packages. Out of these, SAP captures about 60
– 70% of the market, Oracle has about 10 – 15 % and the remaining 15 – 20% is
distributed among the rest.
SAP is strong in supporting manufacturing and related-activities industries. HANA
will be SAP's own database replacing Oracle & other databases in use now.
SAP (Systems Application Products / Process for Data Processing)
R/3 (Real-time 3-Tier Architecture)
SAP is divided broadly into three categories: Logistics, Finance and HR.
Logistics consists of Material Management (MM), Sales & Distribution (SD),
Production Planning (PP), Quality Management (QM), Plant Maintenance (PM),
Project Systems (PS) and others.
 Finance includes Finance and Controlling
 HR includes Personnel Administration (PA), Payroll, Time Management and
others.
 New Dimensional products include
-BI/BW – Business intelligence / Business Warehousing
-CRM – Customer Relation Management (enhanced SD)
-SRM – Supplier Relation Management (enhanced MM)
-BPC – Business Planning & Consolidation (enhanced FI/CO)
-APO / SCM – Advanced Planning & Optimization / Supply Chain
Management (enhanced PP + SD)
 Some of the Industry Specific Software developed by SAP:
IS – Retail
IS – Oil & Gas
IS – Apparel & Food Service
IS – Utilities
IS – Banking…. and others
Types of SAP projects: 1. New Implementation project
2. Roll – Out project
3. Upgrade project
4. Support project
New Implementation: Is a new project customization and installing SAP system at
client / company end.
Roll-Out: Implementation in another country / location for a group using templates
developed at another location where SAP already implemented / installed.
Upgrade: Old version upgrade to latest. For instance, upgrading from SAP 3.0 to
ECC 6.0 (which is the latest)
Support: Providing support / maintenance for an already implemented project.
Kinds of Roles in SAP projects:
1. Functional Consultant like MM, SD, FI/CO, HR, etc.
2. Technical Consultant like ABAP, BI
3. Techno-Functional consultant like MM + ABAP
4. BASIS Administrators (like System administrators)
SAP Architecture:
Database Server
|
Application Server 1 Application Server 2
| |
Presentation Server 1 Pres. Server 4
Pres. Server 2 Pres. Server 5
Pres. Server 3 Pres. Server 6
Database Server has a SID (system ID) which is a 3 character alphanumeric, first
one has to be alpha.
Application Server has an instance number (ranging from 00 to 99)
Presentation Server is the Logon Pad / GUI (Graphic User Interface) where
commands are entered by users.
Application Server is used to distribute users so that database server is not
overloaded. It has an ABAP layer, which reads and processes the requests we
setup.
15/07/2012
Reports: Purchase Orders Vendor Company
Goods Receipt Material Company Code
Vendor Invoice General Ledger A/c Plant
MRP others Storage Location
| | |
Transaction Data Master Data Customization Data
For creating / generating reports, we need data like vendor, material, general
ledger account.
For getting this data, we need company structure like company name, company
code, plant, storage location, etc.
This company data / structure is customization data, which is configured by SAP
consultants.
The data (vendor, material, etc.) is called master data & the automated data (PO,
goods receipt, etc.) is called transaction data, both of which are given by business
user / end user using SAP Easy Access Screen or Front End Screen.
Data which is constant in the database for a long time is the master data. Ex:
Material Master, Vendor Master, etc.
Transaction Data records the day-by-data business information. Ex: Purchase
Order, Goods Receipt, Invoice, etc.
Any data in SAP has to be either Master Data or Transaction Data. During
implementations, Master data is created using the migration tools, mostly through
excel sheets or through other software being used by client.
SAP MM SCREENS
To begin, click on the logon pad on your desktop. If we are not able to see the
logon pad, please escalate to project lead or the local system admin saying GUI /
logon pad is not loaded.
After this, select the required server and click log-on.
Enter Client (identifies the company / client you are working on, is a number from
100 to 999)
Some of the Default or Blocked numbers are:
000 for SAP Master Client,
001 for Copy of Master Client,
066 Early Watch Clients for SAP,
800 for Training Client (in real-time, called SANDBOX)
Enter User / Password (for example, FIUSER1 / ind123456)
By default, language is set to English but can be changeable to whichever language
is available in the SAP system.
After logging on, the first screen we get is the SAP Easy Access Screen, where
reports, transaction data are created.
For every activity/business transaction in SAP, we have both a navigational path
and a transaction code (shortcut). By default, every/any activity in SAP has a
transaction code.
Mapping client data to SAP system is implementation. Mapping can be done by
customization or ABAP.
Client data mapping can be done by Customization, ABAP or Enhancement. If not
the above, then client has to change the business process.
While mapping / creating the system, try to configure / customize to the maximum
extent possible.
ENTERPRISE STRUCTURE:
Company
Company Code 1 Company Code 2
Plant 1 Plant 2 Plant 3 Plant 4
-Storage1 - Store3 - Store5 - Stor7
-Store 2 -Store4 - Store6 - Stor8
Company & Company Code are created by FI/CO, whereas Plant / Storage codes
are created by MM consultants.
Purchase Organization (where we need to create the purchase order) is created by
MM consultant and can be created at company, company code or plant level.
Company code – level at which the profit / loss account is created/maintained.

Plant is where we are doing some kind of business activity or service.
Storage location is where we keep / store the material.
Purchase Organization is like the purchasing department which deals with vendors
/ sellers.
Ex: COMP.CO - Company (Max. 6 alphanumeric char)
|
COCD - Company Code (Max. 4 Alphanumeric char)
|
P1 P2 - Plant (Max. 4 Alphanumeric char)
| |
P1S1__P2S2 P2S1__ P2S2 - Storage Location (Max. 4 as plant)
Based on client requirement / business, we create the blueprint.
Configuration of Enterprise Structure:

Creation of Company:
Navigational path: SPRO – IMG – Enterprise Structure – Definition – Financial
Accounting – Define Company [SPRO is the transaction code to get to the
configuration screen from Easy Access screen. IMG is implementation guide].
 Click on execute for define company (stop watch symbol).
 Click on New Entries to create company information.
 Enter/update company information as per the screen steps. [Any field which
does not get the pop-up beside it is an unlocked field and any data can be
entered. For fields that get the pop-up or are locked, data should be chosen
from the list in the SAP system. Hitting F4 while in that cell brings up the list
of available options. Hitting F1 while in that cell bring up more information on
what that cell pertains to.]
 After entering/updating information, hit enter key and click save button at
the top of the screen.
 We get a customizing request prompt (this will be explained later in detail).
Click on create request (blank page symbol). Enter short description of the
field/company you just created is about and click on save. [Customization
Request Number – SR6K900040, in this the first three chars are SID, next two
are constant, and the rest are the actual request number for that particular
transaction.]
17/07/2012
Creation of Company Code:
Navigational Path: SPRO – IMG – Enterprise Structure – Definition – Financial
Accounting – Edit, Copy, Delete, Check Company Code.
 Click on Execute icon; when you get the options to choose, double click on
"copy, delete and check company code".
 Go to Copy organizational object in the objects bar. Enter the details to copy
the company code info from built in code (1000) to user created code (ex:
COCD). On the prompt, click on continue, then click yes to copy the built-in
GL account info the user created one and make sure to change the local
currency. Then keep clicking continue/select until the copying is completed.
 Click save and back button, now choose "edit company code details".
Change/update the company details, like name, address, country, local
currency, etc. and after updating, click save.
[Note: Creation of company and company code is done in real-time by FI/CO
consultants; the above is for only practice/training purposes.]
Creation of Plant:
Navigational Path: SPRO – IMG – Enterprise Structure – Definition – Logistics
General – Define, Copy, Delete, Check Plant.
 Click on Execute icon; when you get the options to choose, double click on
"define plant".
 Go to New Entries, enter all the required plant details, including factory
calendar, address, plant name, etc. [Factory calendar is defined by either HR
or PP consultants]. After everything, click on save. Repeat these steps for all
the plants.
Creation of Storage Location:

Navigational Path: SPRO – IMG – Enterprise Structure – Definition – Material
Management – Maintain Storage Location [can be created only for Plant location].
 Click on execute & when prompted to enter the plant code, enter the plant
code for which the storage location is being created.
 Click on continue; Go to New Entries and enter the requisite storage location
information. Click on save; repeat these steps for all storage locations under
each plant, making sure that the plant is identified properly.
Creation / Maintenance of Purchase Organization:
Navigational Path: SPRO – IMG – Enterprise Structure – Definition – Material
Management – Maintain Purchase Organization.
 Click on execute, go to New Entries and define / enter the new Purchase
Organization details.
Assignment:
 Assign Company Code to Company:
Navigational Path: SPRO – IMG – Enterprise Structure – Assignment –
Financial Accounting – Assign Company Code to Company. Click on execute
and enter the required details. [In real time, this is done by FI/CO
consultants].
 Assign Plant to Company Code:

Logistics General – Assign Plant to Company Code. Click on execute, go to
New Entries, enter details & click save.
 Assign Purchasing Organization to Company Code:

Materials Management – Assign Purchase Organization to Company Code.
Click on execute, go to New Entries and enter the required details. Click on
save after completing.
 Assign Purchasing Organization to Plant: Navigational Path:

Materials Management – Assign Purchasing Organization to Plant. Click on
execute, go to New Entries, enter the required details and click on save.
Company Code Settings for Material Management:

Navigational Path: SPRO – IMG – Logistics General – Material Master – Basic
Settings – Maintain Company Code for Material Management. Click on Execute.
Select the company code and update Year and Month / Period of operation.
[Note: This has to be done before creating any material – using MM01 – in SAP.]
20/07/2012
MATERIAL MASTER
Material Master is used to maintain information on all the material / goods /
services that an organization deals in or needs for production. Material master
data can be divided broadly into Basic Data, Purchasing, Sales, MRP (Material
Requirement Planning), Production, Warehouse Management, Accounts, Costing
and others. These all are called VIEWS (also known as User Departments). Each
VIEW can have different fields, called Sub Screens. For instance, Basic Data has
Basic Unit of Measure, Material Group, Description, etc.
To create a Material, we need the following info:
- Material Number (either internal or external)
- Industry Sector
- Material Type
- Organizational element.
Material Number is the unique code for a particular material, which when defined
by the system will be internal (number range is 1000 to 1999), whereas if user-
defined will be external (Alpha-numeric range is 2000 to 2999).
Industry Sector is the industrial area in which the company operates, for instance,
retail, pharmaceutical, etc.
Material Type defines what kind of material is being maintained. SAP has several
predefined Standard Material Types, for instance,
ROH – Raw Material,
FERT – Finished Material,
HALB – Semi Finished,
HAWA – Trading Goods,
VERP – Packing Material,
UNBW – Non Valuated Material,
NLAG – Non-Stock Material and others.
Organizational Element includes company code, plant, storage location and others.
*** [Note: Before creating any material, please complete company code settings
for material management and also update the settings for Material Type for
each material that you want to use/define.] ***
CREATION OF MATERIAL MASTER (Tc = MM01):
Navigational Path: SAP Easy Access – Logistics – Material Management – Material
Master – Material – Create (General) – MM01 Immediately. Click on Immediate.
Enter Material Number, Industry Sector & Material Type. Click Enter and select the
types of VIEWS needed (for instance, Basic Data, Purchasing, General Plant
Data/Storage, Accounting, etc.).
[Note:
1. If we leave the material number field blank the system will generate material
number internally automatically.
2. We can also choose some of these views to be default views when creating the
material master. To do so, choose the views that are needed and click on Default
Views tab at the bottom of the pop-up window.
3. For each Material Type that we use ensure that the Material type attributes
are defined for quantity / value updating for each plant defined.]
 After selecting the VIEWS, enter the organizational info (i.e. plant & storage
location) in the pop-up window for which you are creating the material
master. A Material Master is specific to a particular storage location.
 First, we get the Basic Data VIEW Sub Screens. Whether it's internal or
external Material Number, enter the description of the Material. [Within the
Sub Screens, the fields marked with the tick-mark are required – mandatory –
fields. Material Group needs to be defined in real-time based on client
requirement.] Basic Unit of Measure and Material Group are mandatory
fields in Basic Data 1 Screen. Old Material Number pertains to the material
number/code already being used by the client. External Material Group
refers to the Vendor Material Group, if the vendor has one. Division is
Production Line information (optional). Product Allocation shows any parts
allocation for particular work/client (these two divisions & product allocation
are maintained by SD consultants). X Plant Material Status shows any
particular value for the material. Normally, other values are not required in
this screen.
 Once done with entering all the required information, pressing “enter” key
will take you to the next selected VIEW.
 Now, we get the Purchasing VIEW sub screens. In this tab, order unit and
purchasing group fields are mandatory. Order Unit shows the purchase order
unit (for instance, kilogram, tons, liters, gallons, etc.). Purchasing Group
refers to the unit / division / department which is ordering / selling the
material. To show the relation between Order Units and Basic Unit of
Measure, click Additional Data tab at the top of the screen, select Convert
Factors to maintain the relation. In other words, this will show how many
basic units make up one order unit. Click on arrow button once done. Again
click on Additional Data; now we see the description option where we get
the option to select a different language for the description field. Unit of
Measure defines the relationship between the order unit and basic unit of
measure? Purchasing Value Key holds the various purchasing reminders and
shipping tolerances. It also gives option for acknowledgement requirement
or not for the material shipment. GR Processing Time shows the time taken
for material to be sold from the time it is received. It is always in days. Post
to Inspection Stock, if selected, will ensure material is flagged for Quality
Inspection. Source List shows the source / vendor from where we get the
material.
 Once done entering all the required information, click on enter key to go to
the next VIEW.
 All the information in the Purchase Data / Storage VIEW is maintained by
WM consultants. Click next for the next VIEW.
 Next VIEW is the Accounts view sub screen, where we need to define the
price for valuation purposes. Valuation Class is a link between material and
General Ledger account. Normally, it is maintained as 3000. Price Control has
two options moving and standard price (this price is used only for valuation
purposes). Enter the price either moving or standard and click on the save
button at the top. This completes creating one material master record for
material only. Repeat these steps for all the material in all storage locations.
CHANGE MATERIAL MASTER (Tc = MM02):

 Enter Material Number.
 Select the VIEW that needs to be changed.
 Make necessary changes and Save.
DISPLAY MATERIAL MASTER (MM03):
 Enter Material Number, plant and storage location to be displayed.
[Note: In general any SAP transaction code, followed by
“1” -> creation,
“2” -> change and
“3” -> display.]
DISPLAY LIST OF MATERIAL BY PLANT (MM60):

Master – Other – MM 60 Material List
 Enter Plant Information and click on execute (F8). (The display is for only
plant by default.)
EXTEND MATERIAL FROM ONE STORAGE LOCATION TO ANOTHER (MMSC):

(Used to copy or extend the material information which is already in use at one
storage location to another location.)
Master – Other – MMSC
 Enter Material Number and Plant code; press enter.
 Enter from Storage Location and to Storage Location information in the table.
Click on save.
22/07/2012
EXTEND MATERIAL FROM ONE PLANT TO ANOTHER PLANT:
 Enter MM01 in the command box at top. (First, check material number by
using MM60)
 Enter Material Number in the copy from tab, press enter key 2 times and
then select the required VIEWS.
 Now, enter the new Plant and Storage Location information.
 Click continue, enter basic data & valuation information and save.
CONFIGURATION OF MATERIAL MASTER:

Configuration is to ensure that the material master displays only those fields that
are required and also to ensure that we select which are mandatory / optional
fields.
Navigational Path: SPRO – IMG – Logistics General – Material Master – Configuring
the Material Master – Define Structure of Data Screen for each Screen Sequence.
 Click Execute (stop watch sign).
 Select 21 (contains all the different views with all related sub screens) and
click Copy As… from the top bar.
 Enter the user-defined Screen sequence name (must start with Y or Z) and a
short description.
 Press Enter (it takes some time for all the VIEWS and sub screens to be
copied from master to copy).
(If you get 'storage location not found' message, either ignore or change the
location code).
 Select the new Screen Sequence and click on Data Screens on the left of the
screen.
 Select all the displayed sub screens then deselect those that you want to
have in the Screen Sequence.
 Now, delete the rest of the VIEWS and click on save.
 Next, select the data screen and click on Sub screens on the left of the
screen.
 Select the sub screen to be deleted and delete. Once done, save the changes.
ASSIGN SCREEN SEQUENCE TO USER-DEFINED MATERIAL TYPE/ TRANSACTION/
INDUSTRY SECTOR:
Navigational Path: – IMG – Logistics General – Material Master – Configuring the
Material Master – Assign Screen Sequence. Click Execute and change "21" view for
all types to "YS" and click on save.
To check, go to MM01 and try to create a new material, you will only see the
VIEWS you configured earlier appearing.
CHANGE MANDATORY FIELD TO OPTIONAL FIELD AND VICE VERSA IN MATERIAL

MASTER VIEWS / SUB SCREEN:
For this, we need to know the table and field names. To know the field and table
names for a particular field in material master, go to the field and click F1. Now
select Technical Info tab at the top of the Help screen and note down the Field
description for Batch Input Screen tab.
Navigational Path: SPRO – IMG – Logistics General – Material Master – Field
Selection – Maintain Field Selection for Data Screens - Click Execute.
 Go to Field Selection Group and select the list of possible values (F4).
 Select the required field and press enter.
 Under Field Selection, for MM01 change the mandatory radio button to
option button.
 Click save and run to check for changes.
MATERIAL TYPE 23/07/2012
Material Type allows us to define the type of material the company deals in with. It
also contains the following indicators
- Number Range
- Accounting Control
- User Dependent/VIEWS and
- External Purchasing allowed or not & Internal Purchasing allowed or not
** SETTINGS FOR MATERIAL TYPE (VERY IMPORTANT STEP TO ENSURE MATERIAL

STOCK IS PROPERLY UPDATED) **
Settings – Material Types – Define Attributes of Material Type: Click Execute.
 Then select the type of material needed and click on quantity/value updating
link on the left of the screen.
 (Valuation Area is always plant for MM in SAP.) Enter the valuation area and
change the quantity & value update. (This will ensure that the material stock
is updated automatically whenever it is added to or removed from.)
 Once done, click on save.
CREATION OF MATERIAL TYPE:

Settings – Material Types – Create
 Select the type of material.
 Click “Copy As” button from the top of the screen.
 Edit the name for the Material Type (starting with Y or Z).
 Press Enter, select continue and save.
 Select the Material Type from the list and click on details to view
attributes/properties.
 Ensure to check the 'external number assignment without check'. This will
allow us to input any number.
[Note: Special Material Type sub screen is maintained by PP consultants. In User
Department, we can define which departments have access to the material type
we are creating.]
 Check/maintain internal or external purchase order values.
 In Valuation, if Price Control check box is selected, it allows for price
valuation methodology.
Define Number Ranges for Each Material Type: Click Execute.
 Click on Material Groups at the top.
 Click on Maintain Groups again at the top and enter the range/short
description.
 Press Enter and then double-click on the Material Type we defined earlier.
 Select the number ranges defined earlier and click Element/Group assign
button at the top and save.
Define Attributes for System Messages: Click Execute

 Change the attribute of the concerned message and save.
(Used to change the attribute of the message from warning to error, error to
warning or no message also)
24/07/2012
CREATION OF INDUSTRY SECTOR:
Navigational Path: SPRO – IMG – Logistics General – Material Master – Field
Selection – Define Industry Sectors and Industry Sector-Specific Field Selection:
Click on Execute.
 Go to New Entries. Enter the new Industry Sector code and short description.
[Note: Field Description refers to the kind of fields needed based on the industry
type.]
CREATION OF MATERIAL GROUP:

Navigational Path: SPRO – IMG – Logistics General – Material Master – Settings for
Key Fields – Define Material Groups: Click on Execute.
 Go to New Entries.
 Enter the new Material Group code (9-character Alphanumeric) and a short
Description & save.
CREATION OF PURCHASING GROUP:

Navigational Path: SPRO – IMG – Material Management – Purchasing – Create
Purchasing Group: Click on Execute.
 Enter the new Group code (3-character Alphanumeric) and a short
description and save.
18/07/2012
VENDOR MASTER
Vendor Master is used to maintain information about all the vendors (suppliers) an
organization deals with on a regular as well as one-time basis. Without vendor
master, it is not possible to generate / create a Purchase Order.
Vendor Master divides vendors into two types – regular and one-time. Regular
vendor is one from whom the organization purchases on a regular basis whereas
one-time vendor as the name suggests is one from whom the organization makes
a one-time only purchase. Another important distinction as far as SAP is concerned
is in the maintenance of vendor info. Regular vendors will each have unique
vendor codes assigned with their all their information (name, address, commodity
being purchased, purchase / payment terms, etc.) stored in the database whereas
for one-time vendor, only the vendor code, but no other vendor-specific
information, is stored in the database.
Vendor data is again divided into three types / parts: General data, purchasing
data and company code data.
- General data includes vendor description, address, bank details, etc.
- Purchasing data includes purchase order unit, minimum order quantity, GR
based control, schema for purchasing organization, etc.
- Company Code data includes reconciliation, sort key, payment method,
payment terms, etc.
General Data + Purchasing data is included for Purchasing Vendor. (Used mostly
for Plant to plant purchases)
General Data + Company Code data is included for Finance Vendor. (Used when
Purchase Order is not raised, cash pay)
General Data + Purchasing Data + Company Code Data is included for Central
Vendor. (Most common type of vendor)
To create vendor master, we need vendor number, purchasing organization,
account group and plant, if specified. Vendor Number can be created both
internally or externally. If internal, generated by system, the number range is from
1000 to 1999; if created externally, generated by user, the number range is 2000
to 2999.
An Account Group is created to club different types of vendors under their specific
category, for instance, stationary, bulk, local, exporters, importers, etc.
Configuration of Vendor Master
1. Creation of Account Group:
Navigational Path: SPRO – IMG – Logistics General – Business Partner – Vendors
– Control – Define Account Groups and Field Selection (Vendor): Click on
execute.
 Go to New Entries,
- enter Account Group (user-defined, so has to start with Y or Z, ex. YS),
- Double click on general data, select the required field to be
displayed/suppressed/required/optional,
- Once done click on save.
- Repeat the steps for the required number of account groups for each
organization.
[Note: Any user-defined group name has to start with Y or Z in SAP. Inco-terms
are international standard delivery terms of goods / services by vendors.]
2. Define Screen Layout Specific to Purchasing Organization:

Navigational Path: SPRO – IMG – Logistics General – Business Partner –
Vendors – Control – Define Screen Layout: Click on execute.
 Go to New Entries,
 When prompted enter Purchasing Organization code,
 Double click on field data, make required modifications for
display/suppress/required/optional,
 Once done click on save.
 If more than on Purchasing Organization, repeat the steps for same.
3. Define Transaction-Dependent Screen Layout:

Vendors – Control – Define transaction-dependent screen layout: Click on
execute.
 Select vendor type (central/purchasing/finance) and do the required
modifications.
4. Define Number Ranges For Vendor Master Records:
Vendors – Control – Define number ranges: Click on execute.
 Then on Intervals and go to insert Interval at the top.
 Define “from & to” number ranges to be used for vendor master number (it
can be either internal or external).
 Press enter once complete.
 Click on back to go back one step & save the data.
[Note: We have to create number ranges for each SAP server separately.]
 Now click on “number ranges” and assign the defined number range to the
required vendor account group. (In real-time, we need to create number
ranges for each account group separately.)
20/07/2012
CREATION OF VENDOR MASTER:
Navigational Path: SAP Easy Access – Logistics – Material Management –
Purchasing – Master Data – Vendor – Central – XK01 Create (XK02 Change & XK03
Display).
 Enter the required information (vendor number if external, company code,
purchasing organization, account group, etc.) & Click on Continue.
 Enter the vendor info (search term refers to the term used to search for
similar types of vendors) and press enter. [Account control, tax, payment,
bank all these are maintained by FI/CO consultants. We only need to get the
reconciliation account info, this allows for auto updating of vendor main
account in the General Ledger. For Training, enter 160000 as recon account
number.] Enter Cash Management Group (domestic) and press enter.
Payment Data tab is maintained by FI/CO consultants, so press enter to next
tab, which is dunning data used to send reminders to customers, again
maintained by FI/CO consultants. Press Enter;
 Now enter Order Currency (INR/whichever is the currency of transaction).
Enter terms of Payment (this is maintained by FI/CO consultants), Inco-terms
(use FOB in Training), Minimum Order Value (minimum quantity to be
ordered in one Purchase Order from the Vendor) and Schema Group Vendor
(will be explained in detail later in the course).
 Next go to Control Data, check GR-Based Inventory verification (invoice
verification to be done only after Goods Receipt), Auto Evaluation of GR Set
at Delivery, Acknowledgement Required (for Goods Received), Auto Purchase
Order (will be explained along with Purchase Order creation later).
 Once done click on save.
This creates a record for one vendor, likewise, repeat the steps to create any
number of vendors.
CHANGE VENDOR MASTER (Tc = XK02):

Select Vendor, Company code and Purchasing Organization and press enter.
Modify the required fields and save.
DISPLAY VENDOR MASTER (Tc = XK03):

This is used to display vendors as per Company code / purchasing organization.
BLOCK VENDORS:
This is used to block/remove defaulting vendors from the master list.
 Enter Vendor, company code and purchasing organization.
 Select whether you want to block from all entities or only select entities
along with the reason for block.
UNBLOCK VENDORS:
This is used to remove the block. Enter the required details and deselect the check
boxes.
FLAG FOR DELETION (Tc = XK06):

This is used to indicate to other entities in the company group that the particular
vendor is being marked to be completely removed from the master list / system.
DISPLAY LIST OF VENDORS: By Purchasing Organization

Purchasing – Master Data – Vendor – List Display – MKVZ Purchasing List. Enter the
required search term and press enter to pull up all the related vendors.
[Note: Just like in Material Master, we can copy the attributes of one vendor to
create another vendor. Please note only the backend attributes are copied,
information specific to vendor needs to be updated again.]
PIR - PURCHASING INFO RECORD (OR SIMPLY, INFO RECORDS):

The main purpose of these records is to get the material purchase price based on
vendor information automatically in the Purchase Order. (If we do not have auto
PIR already set up, when creating Quotation or Purchase Order if we select the
'Info Record Update' checkbox, then PIR is automatically created when we enter
the price. To create an Info Record, we need vendor and material information,
other information is entered manually.
[Note: Purchase Info Record Standard Document Type for Stock Material is “IL” &
for Non-Stock Material is “IN”]
CREATION OF PIR:
Purchasing – Master Data – Info Record – ME11 (Create)
- ME12 (Change) &
- ME13 (Display)
 Enter Vendor, Material code, Purchasing Organization and Plant.
 (In the tabs, Info Category is very important & mandatory field as it defines
the procurement.) Select “Standard” in Training for Info Category.
 Continue to press enter until we get to Control Tab, enter “1” for planned
delivery time (this defines the number of days the vendor normally takes to
deliver the material once purchase order is sent) and then set standard
quantity.
 In conditions, enter net price and press enter, save after
updating/maintaining all required information.
23/07/2012
DISPLAY PURCHASING INFO RECORD
Display the Info Record by:
Vendor or Material:
Purchasing – Master Data – Info Record – List Displays
By Vendor (Tc = ME1L): Enter the vendor number or plant or required criteria,
then click on execute. Select the required info record and click view to get the
details.
By Material (Tc = ME1M): Enter the material number, plant or the required
criteria, click execute and select the required info record & click view to get the
details.
CONFIGURATION OF PURCHASE INFO RECORD:

Navigational Path: SPRO – IMG – Material Management – Purchasing – Purchasing
Info Record
1. Define Number Ranges: Click on Execute.
 Click on Groups Maintain at the top. Next, go to group insert.
 Enter the short description with the number range. Press Enter key.
 Double-click on “IL”. Now select your number range, click on Element/Group
assign button at the top and save.
2. Define Screen Layout: Click on Execute.

 Select the required Field Selection (for instance, ME11),
 Double click on group (for instance, basic data),
 Make the required changes/modifications and click on save.
SOURCE LIST
It is the list of possible suppliers based on material by plant location.
CREATION OF SOURCE LIST:

Purchasing – Master Data – Source List – ME01 Maintain (to both create and
change).
 Enter Material number and Plant info.
 Enter the vendor info. And Save.
(This option can also be used to block a vendor based on particular material type.
Select the block check box while entering the info. We can maintain this list by
either uploading existing data in excel or MS Access or manually. We can also
specify fixed / single vendor for particular material. We can also maintain the
agreement copy in this List screen.)
ME01 – Maintain;
ME03 – Display source list;
ME04 – Changes Log.
CONFIGURATION OF SOURCE LIST:

Navigational Path: SPRO – IMG – Material Management – Purchasing – Source List
– Define Source List Requirement at Plant Level. Click on execute and select the
required plant. If we check the source list check box, then all the material
maintained for that particular plant need to have the source list maintained.
(Normally, Source List requirement check box is selected / maintained while
creating the material master).
MATERIAL MANAGEMENT TRANSACTION DATA

BASIC PROCUREMENT/PURCHASING CYCLE (INTERNAL CUSTOMER):
1. When a department/section needs a particular material/good, they send the
request to the Purchasing Department. This request is called Purchase Requisition
(PR). It can be raised either manually or automatically thru MRP in SAP. The auto
requisition document is called Internal Purchasing Document.
2. If the Purchasing Department sees that there is no stock available, they send a
Request for Quotation to possible vendors from the source list for that material /
good.
3. Vendors, based on need, send their Quotations, which is entered in the SAP
system by the Purchase Department.
4. Then they compare the Quotation/Prices and finalize the vendor for the supply.
5. Once finalized, Purchase Department sends the Purchase Order to the selected
vendor. (This is done after approval process for the Purchase Order which will be
covered later.)
CREATION OF PURCHASE REQUISITION:
(Note: Standard Document type for Purchase Requisition is NB) Any document is
divided into Header, Item Overview, Item Description and Document Overview
on/off parts.
Purchasing – Purchase Requisition
-ME51N (Create);
-ME52N (Change);
-ME53N (Display).
 Select ME51N (if source determination check box is selected, then the
vendor information is updated automatically if the material has a fixed
vendor).
 Under Header, we normally do not maintain anything in Purchase
Requisition.
 Now open Item Overview & Enter material number and other required info
(like required quantity, required by date, etc.). The information we enter in
the Item Overview is automatically split into several tab formulated
information. The pricing in the Purchase Requisition is taken from valuation
tab in the material master; it is not the final/purchase price but only an
indicator of the approximate cost for the total material. The other
information for material and vendor is taken from material master and
vendor master respectively. Master Data, Quantities/Date, Valuation, Source
of Supply, Status, Contact Person, Texts and Delivery Address are the
different tabs that we find at the bottom.
 Click the 'check' button at the top. If no errors found, save the data.
24/07/2012
CREATION OF REQUEST FOR QUOTATION (RFQ):
Purchasing – RFQ / Quotation – Request for Quotation – ME41 Create (ME42 –
Change; ME43 – Display). **Standard document type for RFQ is AN. **
 Click ME41 Create.
 Enter Quotation deadline date which is the last date quotations should be
received from vendors.
 Enter Purchase Organization, Purchase Group, Plant and Storage Location
information.
 Click on Reference to Purchase Requisition button at the top.
 Enter the Purchase Requisition number, if not enter plant and material
number the system will generate PR-No.
 Click on continue.
 Enter collective number (10-character alphanumeric; will be based on
material type).
 Press enter and select the purchase requisition that we entered above.
 Click the 'Adopt + Details' button at the top and press enter to transfer the
details to RFQ.
 Click on Vendor Details. Select the required vendor and click on save.
CREATE / MAINTAIN QUOTATION:

[Note: The document number for both RFQ and Quotation are the same in SAP.
The only difference is that the Quotations have price information for the
material.]
Purchasing – RFQ / Quotation – Quotation
 Click ME47 Maintain (ME48 – Display & ME49 – Price Comparison)
 Enter RFQ number and press Enter.
 Update the price for the specific vendor and click on save.
 Next, click on ME49 Price Comparison.
 Enter the collective number and click on execute.
[Note: We will see a tabulated form of prices from RFQ showing different prices
and material number in ascending order and if we click on save the lowest price
will be saved as market price.]
CREATE PURCHASE ORDER: Standard Document type for Purchase Orders is NB **
Purchasing – Purchase Order
 Click on ME21N Create (ME22N – Change & ME23N – Display).
 Click on Document Overview On button at the top.
 Click on Selection Variant on the left of the screen. (Here, we need to select
the reference on which the Purchase Order is created).
 Select Request for Quotation.
 Enter the requisite information and click on continue. We get the relevant
RFQ numbers updated.
 Select the required RFQ on the left and either drag/drop to the basket on the
right or click on Adopt at the top.
[Note: Once the RFQ is dropped in the basket, all the other information is
automatically updated from RFQ, Material Master and Vendor Master. In this it
is important to keep track of the Quantity Ordered & Delivered.]
CREATION OF PURCHASE ORDER MANUALLY:

 Click on / Go to ME21N Create.
 Select NB Standard Purchase Order Document type.
 Enter Vendor Number, Purchase Organization, Company Code, Material
Number and other required info.
 Click on save to create the Purchase Order.
[Note: All the information that we enter manually or is updated automatically is
again divided into tabular format for easy access to the information at the
bottom of the screen. All the required information is taken automatically /
selected manually from Vendor Master, Material Master, Purchase Requisition,
RFQ and others.]
CHANGE PURCHASE ORDER (Tc = ME22N):

 Go to Other Purchase Order and double click.
 All the relevant information is automatically displayed.
 Change the required information and click on save.
DISPLAY LIST OF PURCHASE ORDERS:
 By Vendor (Tc = ME2L) and By Material (Tc = ME2M)
 Enter the required vendor/material number and click on execute button.
 We see all the Purchase Orders based on the selection.
GENERAL ANALYSIS FOR PURCHASE ORDER (Tc = ME80FN):

Purchasing – Purchase Order – Reporting
 Click on ME80FN and enter the required Purchase Order Number.
 Click on Execute to get the report.
OUTLINE AGREEMENTS
Outline agreements are broadly divided into two types: Contracts (Quantity &
Value) and Scheduling Agreements. These are agreements between companies
and vendors for supply of material / service at a benefit for both parties.
In a Quantity Contract, we maintain validity period of the contract, target quantity
to be delivered within that period, type of material, vendor information and
pricing information.
In a Value Contract, we maintain everything in a Quantity Contract except that in
place of target quantity to be delivered it the target material value that has to be
reached in the given period.
In a Scheduling Agreement, Quantity is predefined and staggered delivery dates
are sent to the vendor for delivery of the material. These dates can be set either
automatically thru MRP or maintained manually. For this delivery, we need to
maintain Schedule Line, which includes all the relevant information like material,
vendor, target delivery dates, etc.
Standard Document Type for Quantity Contract is “MK”.
Standard Document Type for Value Contract is “WK”.
Standard Document Type for Scheduling Agreement is “LP”.
25/07/2012
CREATION OF CONTRACT:
Navigation Path: SAP Easy Access – Logistics – Material Management – Purchasing
– Outline Agreement – Contract
 Click on ME31K Create (ME32K – Change & ME33K – Display)
 Enter Vendor Number and choose type of contract (quantity or value).
 Leave the agreement number field blank as it is generated internally.
 Enter Purchasing Organization, Plant, Storage Location & Purchasing Group
and press enter.
 Enter Validity Period and press enter.
 Now, enter Material Number, Target Quantity, Unit of Measure and Net Price
if different than the Quotation.
 Press enter and save.
CREATION OF RELEASE ORDER AGAINST CONTRACT:

[NOTE: Release Order against a contract is nothing but Purchase Order w.r.t
contract.]
 Go to ME21N (Purchase Order creation).
 Click on Document Overview On button at the top.
 Click on Selection Variant button on the left, choose Contracts from the list
and click execute to search.
 Select the required contract and drag/drop to the basket on the right.
(If you get a 'Contract not yet released' error, complete Contract Release process.)
(If Contract already released, enter the Order Quantity and the scheduled date for
that Release Order.)
(If you get a 'Source not included in the list…' error, go to ME01 and maintain
agreement / contract as the source).
 If no errors, click on save to generate the Release Order.
(For creating a value contract, follow the same steps as above except for quantity
we enter the value and the document type also differs.)
DISPLAY CONTRACT STATUS:

 Go to ME33K (Display) and enter the Contract Number.
 Select the line item and click on Release Documentation button at the top to
view details.
CREATION OF SCHEDULING AGREEMENT:
Purchasing – Outline Agreement – Scheduling Agreement - ME31L (Vendor
Known).
 Enter Vendor Number, Agreement type (LP), agreement date, Purchasing
Organization, Purchasing Group, Plant and Storage Location.
 Press enter key and input the material number, target quantity and price.
 Save.
CREATION OF SCHEDULE LINE MANUALLY:

Purchasing – Outline Agreement – Scheduling Agreement – Delivery Schedule –
ME38 Maintain.
 Enter the Scheduling Agreement number.
 Select the required line item and click on Delivery Schedule button at the
top.
 Enter the relevant delivery date and corresponding quantity to be delivered.
 After entering all the required dates and quantity, click on save.
[Note: If vendor communication is automatic, then once you click on save, the
schedule is sent automatically to the vendor. If not, we need to send it manually.]
OPTIMIZATION OF PURCHASING
Step 1: Based on Requirement/MRP
Purchase Requisition is created, which is assigned to a supplier / vendor.
(This assignment is done either manually or by quota arrangement or by fixed
vendor)
Step 2: Convert Purchase Requisition to Purchase Order
Step 3: Send Purchase Order to Vendor automatically (this is also called output
determination).
Step 4: Vendor sends Goods to the company (Goods Receipt)
Step 5: We perform Invoice processing or ERS (evaluated receipt settlement).

CONVERT PURCHASE REQUISITION TO PURCHASE ORDER:
Step 1: To do this conversion, we need to first select the auto PO check box in the
material master settings.
 Go to MM02 and enter the material number.
 Select Purchasing VIEW and enter the plant information.
 Select the Auto PO check box and click on save.
Step 2: Maintain Auto PO setting for Vendor Master.

 Go to XK02 and enter vendor number, company code and purchasing
organization.
 Select Purchasing VIEW.
 Select the Auto PO check box and click on save.
Step 3: Create Purchase Requisition.

 Go to ME51N Create.
 Enter document type, material number, quantity, plant and other required
information.
 Click check and if no errors, click on save.
Step 4: Assign Vendor to Purchase Requisition.

Purchasing – Purchase Requisition – Follow On Functions
 Go to ME57 Assign.
 Enter Plant Info and select the relevant Purchase Requisition.
 Click on Assign Manually, enter the vendor number and click on save.
Step 5: Convert Purchase Requisition to Purchase Order (Must have fixed vendor
for the material)
Purchasing – Purchase Order – Create
 Go to ME58N Auto from Purchase Requisition.
 Enter the requisite level (company code, plant, etc.) where Purchase Order
needs to be created.
 Click on execute and any Purchase Requisitions pending will be auto
converted to Purchase Orders.
[NOTE: Once Purchase Order is created, if vendor communication is automatic
then the POs are sent to vendors automatically.]
RELEASE PROCEDURE (Approval Process): Applicable for any kind of Purchase

Order
Step 1: Criteria for approval of Purchase Order, i.e., whether amount, quantity,
document type, etc. (Here, high value Purchase Order is called Direct PO whereas
low value PO is called indirect PO).
Ex: If Purchase Order Value > 1000 $/INR (Say this is our Characteristic-1) and
Document Type = NB (Say this is our Characteristic-2)
Then Need to take Approval for the Purchase Order
Step 2: Create a Class to store the Characteristics.

Class (User-defined)
-Characteristic 1
-Characteristic 2
Step 3: Release Code (Level at which the PO is approved. Possible to have 8 levels,
each level is a release code. However, in real time normally we use max up to 3 or
4 levels).
Ex: Code 10 – Manager Level
Code 20 – CEO Level
Step 4: Release Prerequisite (defines the preconditions for the release code levels)
Ex: For Code 20 release, is it mandatory to have code 10 release it first or not.
Step 5: Release Indicators (indicates the approval status, whether blocked or

released)
CONFIGURATION OF RELEASE PROCEDURE:

Navigational Path: SPRO – IMG – Material Management – Purchasing – Purchase
Order – Release Procedure for Purchase Orders
1. Edit Characteristics: Click on Execute.
 Define the characteristic name (starting with Y or Z as it is user-defined, for
ex. znpo_value).
 Click on Create on the right side.
 Give Short description of the characteristic.
 Go to Additional Data tab and enter table name as "CEKKO".
(This is the default table for communication structure for release procedure)
 Place cursor in 'Field Name' and press F4.
 Click on continue if you get a 'No object found' message.
 Click on 'All Selections' button at the bottom of the pop-up window.
 Now, select Structure check box. Click on continue.
 Note down the field name (for example, field name GNETW for value).
 Press enter and click on continue if you get a 'Copied data from ABAP table'
msg.
- Enter currency (INR).
- Select multiple values and interval values allowed in value
assignment on the right.
- Go to Values tab.
- Enter the criteria (for example, > $1000)
 Save.
We have just created one characteristic class. Similarly, for all characteristics you
want to use in the release procedure should have a class defined for it like above.
2. Edit Class:
 Enter the Class name (for example, SD).
 Choose Class Type 032 (release strategy).
 Click on Create on the right side.
- Enter a short description.
- Click on Char tab and assign the characteristics defined earlier.
- Click on Save.
3. Define Release Procedure for Purchase Order: Click on Execute.

a. Click on Release Groups:
 Delete any existing group already defined (only one Group possible at any
time).
 Give Release Group Name (ex. SR) and the class name defined in the previous
step.
 Click on save.
b. Click on Release codes:
 Give Release Group Name, release code and assign level to code.
(Ex: SR – 10 – Supervisor or SR – 20 – Manager).
 Click on Save.
c. Click on Release Indicators:

 Enter Release ID (one character Alpha Numeric) and short description (ex. 1 –
blocked; 2 – released).
 For the released ID, select the release check box. Click on save.
(Changeable – Defines whether the release strategy needs to be changed in case
of any changes. Select 3 for now. Value change defines how much variance is
allowed for value to be changed after the release is saved; for now, choose 20%).
d. Click on Release Strategy.

 Enter Release Group name (ex. SR).
 Enter Release Strategy name (ex. SR) and a short description.
 Enter the release codes defined earlier and press enter.
 Go to Release Prerequisites and select the checkboxes for those that you
deem mandatory. Click on continue.
 Go to Release Statuses and select the blocked / released status for the codes
according to need. Click on continue.
 Go to Classification and select the value for the characteristics defined
earlier. Click on back and save.
Once complete, if you want to do a simulation for the release strategy, press on
Release Simulation button and enter the required information to complete the
simulation. To check the release codes, create a new Purchase Order, run
everything and check to see if the release strategy tab shows released or not. If
you do everything as defined then the release codes and final release should show
as "Released".
[Note: ME29N code will allow us to release one PO at a time. On the other hand,
ME28 code will allow us to release all POs for a particular release code. For
ME28, we need to enter the release code and release group. Then select the POs
to be released.]
27/07/2012
CUSTOMIZATION OF PURCHASING:
Navigational Path: SPRO – IMG – Material Management – Purchasing – Material
Master
1. Define Shipping Instructions. Click on Execute.
 Enter Shipping Instruction code (2-character, starts with Y or Z since user-
defined) and description.
 Choose Print Instruction check box whether Yes or No and click on Save.
 Select the instruction just created and click on Compliance with Shipping
(Instruction button at top.)
- Go to New Entries.
- Define the instruction (ex. 10 – Handle with care – 100%; 20 – Please
Maintain 30 Degree C – 100%)
- Here, we can also define which will be the default instruction and
save.
2. Define Purchasing Value Key: Click on Execute.

 Enter the Purchasing Value Key (4-character alphanumeric, ex. SPVK).
 Enter reminder value, tolerances value, acknowledgement required fields
and others required.
 Press enter and click on save.
** 3. Entry aids for Items without Material Master. (Important): Click on execute.
 Enter the Material Group and assign the valuation class & purchasing value
key.
 Save.
Navigational Path: SPRO – IMG – Material Management – Purchasing – Vendor

Master
4. Define Terms of Payment (in real-time, created by FI/CO consultants): Click on
execute.
 Go to new entries.
 Enter the required info.
Ex: Payt. Terms (code) – ZSDT
Account type – choose either customer & vendor or any
one.
Default for baseline date – select Posting Date.
Payment Terms – 10% - 5 days; 5% - 8 days; - Nil – 9 days.
5. Check Inco-terms: Click on execute.

 Enter Name and Short Description. Choose Location Mandatory check box.
6. Configuration of Purchasing Info Record - Completed.
7. Configuration of Source List - Completed.
8. Configuration of Quota Arrangement: Quota arrangement defines the

percentage of purchase from different vendors for each Purchase Order.
Navigational Path: SPRO – IMG – Material Management – Purchasing – Quota

Arrangement
A. Define Number Ranges: Click on execute.
 Go to Groups Maintain button at the top. (** Standard document type for
quota arrangement is “Q” **)
 Go to Group Insert and enter text with number ranges. Press enter.
 Now select the number range we just created and then double-click on
document type.
 Now, click on Element/Group Assign button at the top to complete assigning
the number ranges.
B. Define Quota Arrangement usage: Click on execute.

 Choose the order type, presenter and click on save.
30/07/2012
9. Configuration of RFQ / Quotation:
Navigational Path: SPRO – IMG – Material Management – Purchasing – RFQ /
Quotation
a. Define Number Ranges: Click on Execute.
 Go to change intervals.
 Go to Insert Interval.
 Define the number range code and the number ranges.
b. Define Document Types: Click on Execute.

(** standard doc type for RFQ / Quotation is AN **)
 Select the document type and click on Copy as....
 Enter the user-defined name and enter the details.
(Itm-Int – Item Interval – defines the interval between numbers in the
number range, like 10, 20, 30 or 1, 2, 3).
c. Release Procedure: (is the same as described for Purchase Order earlier).
d. Define Screen Layout at Document Level: Click on Execute.

 Select the transaction code you want to define the screen layout for.
 Click on the details button at the top.
 Maintain the fields for required/Optional/Display entries.
 Click on Save.
31/07/2012
INVENTORY MANAGEMENT (IM)
The main aim of the inventory management is to maintain stock both by quantity
and value. Without this auto-update of stock, it is not possible to maintain the
inventory. In inventory management, it is important to know the movement types.
When a good / material is received / sent out of the storage location or plant, it is
described as being moved.
Some of the important movement types in SAP are as follows:
101 – Goods Receipt (GR) from Vendor.
201 – Goods Issue to Cost Center.
261 – Goods Issue to Production.
301 – Stock Transfer from Plant to Plant.
311 – Stock Transfer from Storage Location to Storage Location.
601 – Goods Issue to Customers.
The number range for these movement types in SAP is from 100 to 999. Basic
Material Movement is divided into:
1. Goods Receipt (GR) – Can be from either vendor or production and it
increases the stock.
2. Goods Issue – Will decrease the stock and it can be to customer,
production or cost center.
3. Stock Transfer – From either plant to plant or storage location to location.
4. Transfer posting – From one type of stock to another type.
(Goods receipt from Production is dealt with by PP consultants whereas from
Vendor is dealt by MM consultants. In stock transfer from one location to another,
the transfer might either increase or decrease the stock quantity depending on
whether the location is sending or receiving the material.)
Types of Stock: The stock/material is broadly divided into three types in SAP:
Unrestricted, Quality and Blocked.
 If the stock/material is of unrestricted type, it can be sent/consumed by
anybody.
 If the stock/material is tagged as Quality stock, then before consumption it
has to clear quality check.
 The stock/material which might go to scrap or out of use & needs to be sent
back to vendor, then it is the Blocked.
The movement of these three types of stock between each type is called Transfer
Posting. Theoretically, both stock transfer and transfer posting are different but in
SAP both are dealt in the same way.
When we move any goods/material in SAP, there are two types of documents
generated by the system:
1. Material document: Related to proof of quantity change.
2. Accounting document: Related to proof of value change due to the
movement of goods / material.
[Note: For any organization valuation (goods / material / service) can be done at
either company code level or plant level. Normally, valuation is done at plant
level only.]
Ex: In the organization structure (with 2 company codes, 4 plants each having 2
storage locations), the storage location 1 under plant 1 has about 100 items. Now,
if we are going to move some of this material to storage location, the plant level
valuation will remain the same as the plant still has those 100 items. This type of
movement where the movement is equal or below the total number of goods /
material between storage locations under same plant is called "Non-Valuated
Movement of Goods".
GOODS RECEIPT (GR)

Goods Receipt can be possible with reference to either Purchase order or
production order. Rarely do we also have another scenario with Inbound Delivery.
(In this, production order GR will be dealt later after PP integration is explained.)
For GR to be reflected properly with reference to Purchase Order, the following
four prerequisites need to be met.
1. Purchase Order should be released using Release Procedure process.
2. The PO should have open items (i.e., items remaining to be delivered).
3. Must have completed MM with FI integration.
4. Must have open posting period.
[Note: In SAP, period means one month. If for instance 2012 is the physical /
financial year, posting periods are 12 corresponding to the calendar or financial
months. At any point of time, SAP allows only one posting period to be open. If
you open the current month for posting, the other months will be automatically
closed for posting.]
After Goods Receipt, the following steps will take place:
1. Material Document is created.
2. Accounting Document is also created if value change.
3. Purchase Order status will be updated.
4. Stock will be updated accordingly.
GOODS RECEIPT WITH REFERENCE TO PURCHASE ORDER:

Navigational Path: SAP Easy Access – Logistics – Materials Management –
Inventory Management – Goods Movement (MIGO)
** With this transaction code, we can do any type of goods movement. **
 Double click on MIGO.
 Choose what we want to do from the first drop down box on the left of the
screen (Goods Receipt).
 Next, choose from which type of document in the second drop down box
(Purchase Order).
 Enter the purchase order number and press enter.
 Check if Plant and Goods Receipt from Vendor code (101) is updated
properly or not.
 If updated properly, the other relevant Purchase Order information should
also be updated in the fields.
 Go to Quantity tab, enter the goods quantity received and press enter.
 Go to "Where" tab, enter the plant info and select "Unrestricted" type in the
drop down box.
 Go to Purchase Order data, set the "Del. Completed" drop down box to "1.
Set automatically".
 After verifying everything is updated properly, check the "Item Ok" check box
at the bottom.
 Click on check button at the top. If no errors found, then click on save.
(Note: Delivery Note refers to the Vendor delivery challan number. Both delivery
note and bill of landing fields are optional fields.)
 When you click on save, if we get any error in posting message, then it means
the posting is being done for the period other than that which is open in SAP.
[Error Message: "Posting only possible in periods 2006/12 and 2006/11 in company code TAMO"
Solution: Go to Transaction code 'MMPV'. Enter the company and period / fiscal year (01/2007).
Click on execute and update months one by one till we reach current period and financial year
(this has to be entered manually for all the months). To check current period, go to transaction
code 'MMRV'.]
02/08/2012
 {Error Message: "Object number range interval 50 does not exist".
Solution: Go to Transaction code 'FBN1',
 Enter company code and click on change intervals.
 Go to Insert Interval and enter 50 in the Number column, 2012 in Year and
define from – to range. Press enter and click on save.
 Go back to MIGO transaction code and press save. Now, you should get
'Material Document #xxx posted' message.}
DISPLAY MATERIAL DOCUMENT:

 Go to Transaction Code 'MB03' to display the material document after
completing GR entry.
 Enter the Material Document number generated in the previous step along
with year and press enter.
 The details of the Material Document will be displayed, check if everything is
correct or not.
DISPLAY ACCOUNTING DOCUMENT:

 Follow the same steps as for displaying Material Document.
 Once you have the Material Document displayed, click on 'Accounting
Documents' document at the top.
 Now, double-click on 'Accounting Documents' in the pop-up window.
 Once this document is displayed, the following indices will be automatically
generated / created.
1. Debit Invoice Account.
2. Credit Goods Receipt / Invoice Receipt Account.
3. Debit Price Difference Account.
[Note: In the Material Master, if the price of material in the Purchase Order is
more than the Standard Price entered in the Material Master, the difference in
these two prices will be stored in the Price Difference account.]
DISPLAY PURCHASE ORDER HISTORY:

 Go to Transaction Code 'ME23N' and click on Other Purchase Order button.
 Enter the Purchase Order number and press enter.
 Click on the 'Purchase Order History' Tab at the bottom.
DISPLAY THE STOCK OVERVIEW:
 Go to Transaction Code 'MMBE'.
 Enter Material Number, Plant & Storage Location details and click on
execute.
 The details of the stock will be displayed for the material number entered.
CANCELLATION OF GOODS RECEIPT / MATERIAL DOCUMENT:

 Go to Transaction Code 'MBST'.
 Enter the material document number to be cancelled along with the year.
 View the details and when you press save the entire document will be
deleted.
[Note: When you cancel the document, the entire transaction will be deleted; it
cannot delete part of the document. For example if the document is for GR of 100
pieces, the entire 100 pieces will be removed from the system.]
DISTRIBUTE THE MATERIAL BETWEEN TYPES AND STORAGE LOCATIONS:

 Go to transaction code 'MIGO'.
 Enter the material and total quantity to be received.
 Press on the four-way arrow button at the bottom.
 Enter the required quantity, type of stock and storage location in the pop-up
window.
 Click on check and if no errors, press adopt.
 Now, on the main document, click on check and if no errors, press post/save.
DISPLAY LIST OF MATERIAL DOCUMENTS:

 Go to Transaction Code 'MB51'.
 Enter the material, plant and storage location information.
[Note: The total stock in this view should match with that in the display for
MMBE transaction code.]
03/08/2012
 {Error: While doing GR for any PO, you get error ' Account determination for
entry INT BSX _____ ___ 3003 not possible' and in the body of the error
message, you see 'Cannot update G/L Account for this transaction'.
Solution: SPRO – IMG – Materials Management – Valuation and Account
Assignment – Account Determination – Account Determination without wizard –
1. Group together valuation areas:
 Click on execute and for the plant you created, enter '0001' in the
Val.Grpg.Code field. Press enter and save.
2. Configure Automatic Postings:

 Click on execute and on the pop-up window, click on cancel.
 Click on Account Assignment tab at the top & double-click on transaction
'BSX'.
 Enter 'INT' in the pop-up window for Chart of Accounts field & click on
continue.
 Check if '3003' valuation class field is reflected in the table or not.
 If not, scroll down and enter' 3003' in the val. class field along with trans.
class as '30010'.
After doing this, while running the GR, if you again get another message similar to
the above but with 'INT PRD __ ___ 3003 not possible', then follow the same steps
as above till you open Account Assignment trans. in Automatic Postings.
 Double-click on trans. 'PSD'.
 Enter val. class '3003' along with '281500' in both debit and credit columns.
 Press enter and click on save.}
GOODS RECEIVING INTO GR BLOCKED STOCK:

[Note: It means conditional acceptance by the company at the time of delivery,
not as goods receipt blocked movement type.]
 Go to trans. code 'MIGO' and enter the PO number.
 Change the movement type (GR goods receipt) at the top right after the PO
number to 103.
 Press enter to load the Purchase Order details.
 Enter the quantity in the tab column and press check for errors.
 If no errors, press post/save.
To confirm, go to 'MMBE' and check if the quantity you entered is reflecting in the
'GR Blocked Stock' field or not.
RELEASE GOODS FROM GR BLOCKED STOCK:

 Go to trans. code 'MIGO'.
 Change the trans. type from 'A01 Goods Receipt' to 'A05 Release GR Blocked
Stock'.
 Enter the material document number for the blocked stock and press enter
to load details.
 Enter the quantity to release and press on check.
 If no errors, click on post/save.
RETURN DELIVERY TO VENDOR:

a. Goods receipt against Purchase Order.
 Go to trans. code 'MIGO' and enter the PO number along with the required
material receipt info.
b. Return Delivery to Vendor.
 Go to trans. code 'MIGO'.
 Change trans. type to 'A02 Return Delivery' and enter the material Doc
number & press enter.
 Enter the quantity to return and press enter.
 Go to reasons for reject and enter the relevant reason which is important for
future reference.
 Press check and if no errors, click on post / save.
[Note: Movement type for return delivery to vendor is 122.]
INITIAL STOCK UPLOADS: (essential for new implementations)

 Go to trans. code 'MB1C'.
 Enter movement type '561', plant and storage location info. & press enter.
 Enter material number and quantity to be uploaded. Press enter and save.
[Note: While saving, if you get the 'Object number range ## does not exist'
message, follow the solution explained earlier above – trans. code 'FBN1'.]
For initial stock update, the following accounting indices will be generated:
1. Debit (Dr) Inventory Raw Material.
2. Credit (Cr) Inventory Taking.
07/08/2012
GOODS ISSUE:
Once we receive the goods, it is possible to issue in the following ways:
1. Production – Movement type: 261 (for this, we need to complete PP
configuration / integration with MM).
2. Customer – Movement type: 601 (for this, we need to complete SD
configuration / integration with MM).
3. Cost Center (Dept. expenses) – Movement Type: 201 (for this, we need to
complete / integrate CO).
[Production & customer goods issue will be covered later).
Cost Center Goods Issue:

Basic Controlling Settings (Note: This is not part of the MM course, it is part of CO)
Navigational Path: SPRO – IMG – Controlling – General Controlling – Organization

1. Maintain Controlling Area: Click on Execute.
 Double-click on Maintain Controlling Area in the pop-up window.
 Go to New Entries at the top.
 Enter a new Controlling Area code, its description and other required fields,
like
Currency should be 10 (company code currency).
Chart of Accounts should be INT.
Fiscal Year Variant should be K4.
Cost center Std. Hierarchy should be the company code.
 If you get a 'Standard Hierarchy Creation' pop-up message, click yes on it.
 Click on 'Assignment of Company Code' on the left side.
 Go to New Entries at the top.
 Enter the company code and press enter & click on save.
 Click on 'Activate Component / Control Indicator' on the left side.
 Confirm the Controlling Area is the one you just created.
 Enter the fiscal year from when you want the controlling area to be active.
 Set the Cost Center drop-down box to '1 Component Active' option.
2. Maintain Number Ranges for Controlling Documents: Click on Execute.
 Enter the controlling area name just created and click on Groups – Maintain.
 Go to Group – Insert at the top.
 Enter the description for the group and the number range you want & press
enter.
 Select the number range and double click on "COIN" object from the bottom
list.
 Click on Element / Group assign button at the top. Click on save.
3. Maintain Versions: Click on execute.

 Go to Entries – Set Controlling Area option at the top and select the
controlling area we just created.
 Select 0 version & click on 'Controlling Area Settings' on the left side.
 Again, select 0 version and click on 'Settings for Each Fiscal Year' on the left
side.
 By default, we get settings for the next five years; ensure 'Changes' option is
selected for the 5 years. Click on save.
Create a Cost Center: Go to Transaction Code 'KS01'

 Go to Extras – Set Controlling Area and enter the controlling area (10
character department name).
 Enter Cost Center name and validity period.
 Press enter and enter the description along with the following
- Cost Center Category should be 4
- Hierarchy Area should be the controlling center.
- Business Area should be 1000.
- Functional Area should be 0400.
Goods Issue to Cost Center: Go to Transaction code 'MIGO'.

 Select A07 – Goods Issue; R10 – Other & movement type 201, “GI” for cost
center.
 Enter the material number in the tab at the bottom along with quantity,
plant and storage location.
 Enter the cost center in the Account Assignment tab, click on Item OK and
then press Check.
 {If you get an error message 'Create account 400000 for <date> as a cost
element in Controlling Area <control area name>', follow the solution given
below: Go to Transaction code KA01 (Create Cost Element code).
 Enter Cost Element after checking the controlling area is the correct one you
are working on. Press Enter.
 Select Cost Element Category as 1 (primary) and click on save.}
 Press check once again and if no errors, click on post/save.
Once done, verify that the following documents are reflecting correct information.
1. Material Document.
2. Accounting Document.
3. Stock update (using MMBE transaction code).
Scraping of Material:
 Go to Transaction code 'MB1A'.
 Enter movement type as 551 (withdrawal for scrapping).
 Enter plant & storage location info and press enter.
 Enter the material number, quantity and cost center code & press enter.
 {If you get an error message 'Account determination for entry INT GBB ____
VNG 3000 not possible', follow the solution given below: Go to Transaction
Code 'OBYC'.
 Double-click on GBB and enter chart of accounts as 'INT'. Click on continue.
 Enter '<blank> VNG 3000 400001 400001' in the columns at the bottom of the
table. Press enter and click on save.
 Go to Transaction Code KA01 to create cost element 400001.
 Make sure the controlling area is correct, enter the cost element and click on
save. } “Press enter once again and if no errors, click on save.”
In the accounting document the following indices will be updated
- Debit (Dr) Inventory Raw Material.
- Credit (Cr) Inventory Scrap.
Stock Transfer from one Storage Location to another Storage Location:
[Note: For this, material should be created/available at both the locations.]
 First, check the particular stock at the first storage location with Trans code
MMBE.
 Go to Transaction Code 'MIGO'.
 Select A08 Transfer Posting; R10 Other and movement type 311 (Transfer
within plant).
 Enter the Material Number & Storage Location for both FROM and
DESTINATION fields in Transfer Posting tab.
 Enter quantity to be transferred and press enter.
 Press check and if no errors, click on post/save.
2. Accounting Document*.
For this transaction, there should not be any accounting document generated.
Stock Transfer from Plant to Plant (One Step): Go to Transaction Code 'MIGO'.
 Select A08 Transfer Posting; R10 Other & Movement type – 301 Transfer
from Plant to Plant.
 Enter the Material Number & plant info in the FROM & DESTINATION fields in
the Transfer Posting tab.
 Enter the quantity to be transferred and press enter.
Stock Transfer from Plant to Plant (Two Step): Go to Transaction Code 'MIGO'.
Step1 - Stock removed from Supplying plant.
 Select A08 Transfer Posting; R10 Other & Movement Type 303.
 Enter Material, plant and quantity in the Transfer Posting tab.
Step2 - Stock received from stock in transit to receiving plant.
 Select A08 Transfer Posting; R10 Other & Movement Type 305.
 Enter Material, plant and quantity in the Transfer Posting tab.
 Press check and if no errors, click on post / save.
08/08/2012
Stock Transfer from Plant to Plant using Stock Transfer Order:
[Note: For this, we need to create a new vendor which would be assigned to the
supplying plant.]
1. Create Vendor: Go to Transaction Code XK01.
 Create a new vendor using your company code, purchase org, etc., till the
Conditions tab.
 Go to Entries – Additional Purchasing Data at the top.
 In the pop-up window, enter the plant code for which you want to assign
this vendor.
 Click on continue and then click on save.
2. Create a Stock Transfer Order: Go to Transaction Code ME21N.

 Select Document type as UB Stock Transport Order.
 Enter the supplying plant, purchasing organization, purchasing group and
company code info.
 Enter the material number, quantity and the receiving plant info.
 Press enter & click on check after checking the Info OK box at the bottom.
 If no errors, click on post / save.
3. Goods Issue from the Supplying Plant using the STO: Go to Transaction
Code 'MIGO'.
 Select A07 Goods Issue; R01 Purchase Order & Movement Type351
Transfer to Stock in Transit.
 Enter the STO number in the PO order number box.
 Click Item Ok box and press check. If no errors, click on post/save.
3. Stock update (using MMBE transaction code) – stock should be
showing in 'Stock in Transit' column.
4. Goods Receipt into receiving plant from Stock in Transit: Go to Transaction
Code 'MIGO'.
 Select A01 Goods Receipt; R01 Purchase Order & movement type 101
Goods Receipt.
 Enter the STO number in the PO order number box.
 Click Item Ok box and press check. If no errors, click on post/save.
3. Stock update (using MMBE transaction code) – stock should be
showing in 'Stock Available' column.
Stock - Transfer from Quality Inspection to Unrestricted: Go to Transaction Code

'MIGO'.
 Select A08 Transfer Posting; R10 Other and Movement type 321 Transfer
Stock from Quality to Unrestricted.
 Enter the material, plant, storage location and quantity info in the tabs at the
bottom.
 Press enter, click on Item OK check box at the bottom & then click on Check.
If no errors, click post/save.
(Other Movement Types:

 322 – Stock Transfer from Unrestricted to Quality Inspection.
 343 – Stock Transfer from Blocked to Unrestricted.
 344 – Stock Transfer from Unrestricted to Blocked.
 349 – Stock Transfer from Blocked to Quality Inspection.
 350 – Stock Transfer from Quality Inspection to Blocked.)
RESERVATIONS
(To reserve material for a particular customer / order / work / cost center)
1. Create Reservation of Material.
- Go to Transaction Code MB21.
- Select Movement Type 201 Goods Issue to Cost Center and press
enter.
- Enter the material and quantity required.
- Press enter and click on save. Press enter one more time.
- Now, double-click on the material number just reserved.
- Check the 'Mvt. Allowed' and 'Qty. is Fixed' check boxes and click on
save.
Once done, verify stock update using MMBE Trans code. The material quantity
entered above should show in 'Reserved' column.
2. Goods Issue against Reserved Stock.
- Go to Transaction code 'MIGO'.
- Select A07 Goods Issue; R09 Reservation & movement type same as
above 201.
- Enter the Reservation number generated earlier.
- Enter the quantity to issue, storage location & check 'Final Issue' check
box.
- Click on Item OK check box at the bottom & click on Check.
- If no errors, click on post / save.
Once done, verify stock update using MMBE Trans code. The material quantity
entered above should not show in 'Reserved' column.
09/08/2012
PHYSICAL INVENTORY PROCESS
The purpose of a physical inventory process is to ensure that the stock in the
warehouse / stores matches with the stock showing as per the books or in the
system. During the inventory process, the entire business is put to a standstill, in
other words, no sale or purchase is done till the inventory is completed. This is also
called 'Stock Taking'. It involves the following steps.
 Create a Physical Inventory document (it indicates which material(s) to
check).
 Print the Physical Inventory document (also called Count Sheets).
 Enter the count of material in the sheets.
 Check the variance report between physical and book stock.
 Send to Finance department for verification & confirmation.
 If required, go for recount.
 Post the difference in the system.
 Once posting is done, the actual physical stock is reflected as stock in the
system (using MMBE).
Navigational Path: SAP Easy Access – Logistics – Materials Management – Physical

Inventory
1. Physical Inventory Document – MI01 Create (MI02 Change & MI03 Display).
 Click on MI01.
 Enter the plant and storage location info.
 Check the 'Posting Block' check box and press enter.
 Enter the material number and press enter once again.
 Select the 'warehouse' option in the 'STy' Column and click on save.
(A Physical Inventory document will be generated with a PI doc number).
2. Print the Physical Inventory document (MI21)

 Enter the Physical Inventory document number, year, and plant & storage
location info.
 Click on Execute and enter 'LP01' in the pop-up print dialog window.
 Click on Print Preview.
[Note: 'LP01' is a dummy printer output method built-in in the SAP system for
training purposes.]
3. Inventory Count – MI04 Enter
 Enter the Physical Inventory document number and fiscal year.
 Press enter and enter the physical count quantity.
 Click on save.
4. Difference – Difference List MI20

 Enter the material (optional), Physical Inventory document number, plant
and storage location. Click on execute. The report will be generated in
tabular format.
 Select the line item and click on 'Post Difference' button at the top.
 It would auto-redirect to 'MI07 Post Difference' transaction code screen.
 Check and update, if required, the information in the fields.
 {Error: If you get 'Account determination for entry INT GBB ___ INV 3000 not
possible' error message, follow the solution below: Go to Transaction Code
'OBYC',
 Double-click on GBB in the table list.
 Enter 'INT' in the pop-up Chart of Accounts window and press on continue.
 Enter '<blank> INV 3000 233000 233000' in the blank row after the last entry
and click on save.}
- Once again, click on save in the post document screen.
(A Material Document will be created for this transaction).
Once done, verify that the Material Document reflects the correct info by going to
transaction code 'MB03'.
With Movement Type 702, the stock will be reduced from the system.
With Movement Type 701, the stock will be increased.
Go to Accounting Document & ensure the following indices are reflected correctly.
1. Credit (Cr.) Inventory Raw Material.
2. Debit (Dr.) Losses - Inventory.
Check the stock: using the transaction code MMBE. The stock should now show
with the reduced / increased quantity.
SUBCONTRACTING PROCESS
In order to procure / produce a finished good, if we provide the raw material /
components required to produce the finished good to vendor / contractor and pay
him a contract fee for production, then this process is called subcontracting. In a
Purchase Order, 'Item Category' option shows by which method we are purchasing
the material.
Example:
A Finished Good (FG-X) 1 Piece |
| | This information is
---------------------------------------------------------- | maintained in
10 Pieces of 10 Pieces of | Bill of Material (BOM).
Raw Material-X Raw Material-Y |
In other words, it takes 10 pieces of RMX and 10 pieces of RMY to produce 1 piece
of FGX. If we provide the raw material to the contractor / vendor to produce the
finished good and pay him a production / contract fee, then the contractor /
vendor becomes a subcontractor.
BOM is a list of components/steps required for producing the material. This is

normally defined / generated by the Mechanical Department.
Steps involved in the subcontracting process.
1. Create the Finished Good material.
2. Create Raw Materials and maintain their stock.
3. Create BOM (normally maintained by PP consultants).
4. Create Subcontracting Purchase Info Record.
5. Create Subcontracting Purchase Order.
6. Create Goods Issue to Subcontractor Vendor.
7. Goods Receipt against the Purchase Order.
[Note: We also need to have a separate vendor created and assigned to this
plant for the subcontracting work.]
1. Create Finished Goods Material: Go to Transaction Code MM01.
 Create a Finished Goods FERT type material.
 Select Basic Data 1, Purchasing, MRP1, MRP2, General Plant / Storage 1 and
Accounting 1 Views.
 Enter information as discussed earlier in material creation for all VIEWS
except the MRP views.
 In MRP1 tab, select 'No Planning' option in the MRP Type field.
 In MRP2 tab, enter 30 in the 'Special Procurement' option.
 In MRP3 tab, if required, select 'KP No Check' option for 'Availability check'
field.
2. Create 2 Raw Materials: Go t Transaction Code MM01.

 Create two Raw Material ROH type materials as discussed earlier.
3. Maintain stock: using the initial stock update 'MB1C' transaction code discussed
earlier.
10/08/2012
4. Create Bill of Material:
Navigational Path: SAP Easy Access – Logistics – Production – Master Data – Bills of
Material – Bill of Material – Material BOM or go to Transaction Code CS01 Create
(CS02 Change & CS03 Display).
 Enter the Finished Goods material, plant, BOM usage and date valid from
info in the fields and press enter.
(BOM USAGE field is normally either universal or production but can also be
anyone in the list).
 Enter the raw material required info in the table columns along with the
quantity required. Click on Save.
5. Create Subcontracting Info Record: Go to Transaction Code ME11.

 Enter vendor, finished goods material, purchasing organization & plant info
in the fields.
 Choose the 'Subcontracting' Info Category option.
 Enter the required info record information as discussed in PIR creation
previously. Press enter and save.
6. Create a Subcontracting Purchase Order: Go to Transaction Code ME21N.

 Select the doc type, vendor and enter the required info for the PO as
discussed in PO creation previously.
 While entering the material info, enter 'L' in the field before it called in the
Info Record type field.
 Now check the tabs at the bottom. In the Master Data tab, click on
components button to the BOM details.
 {Here, if you get 'MRP parameters for plant 'xxx' have not been maintained'
error, follow the solution below.
Path: SPRO – IMG – Materials Management – Consumption based Planning –
Plant Parameters – Carry Out overall Maintenance of Plant Parameters. Click on
Execute and then, click on copy. Enter copy from '1000' to '< your plant name>'
and click on continue. Click on save.}
 Once again, click on components and check the BOM list; it should be the
same as you created earlier.
7. Goods Issue to Subcontracting Vendor: Go to Transaction Code ME20.

 Enter vendor & plant info and click on execute.
 Select the required line item and click on 'Post Goods Issue' button at the
top.
(Using movement type 541, we issue material/goods to the subcontracting vendor
from the warehouse.)
 In the pop-up window for Goods Issue, enter the storage location and press
continue.
To check whether the stock issued is updated properly or not, go to Transaction
code MBLB. Enter the vendor and plant info & click on execute. The stock
information will be displayed in tabular format. The material issued to
subcontractor is called 'Material provided to the vendor & denoted by 'O'.
8. Goods Receipt from Subcontractor with reference to the Subcontracting

Purchase Order: Go to Transaction Code 'MIGO'.
 Select A01 Goods Receipt; R01 Purchase Order and movement type 101
Goods Receipt.
 Check whether material info, quantity and plant/storage location info
displayed is correct or not.
(By using movement type 543, vendor is going to consume the goods / components
sent to them.)
 Click on Item OK check box and press check.
 {Here, if you get 'Account determination for entry INT GBB ___ VBO 3000
not possible' error, follow the solution below: Go to Transaction Code
'OBYC'.
- Double-click on GBB and enter 'INT' in the Chart of Accounts pop-up box.
- Click on continue.
- Verify VBO reflects 3000 valuation class or not.
- If not, enter '<blank> VBO 3000 400020 400020' in the first empty row at
the bottom of the table form. Press enter and save.}
 Press check once again and if no errors, click on post / save.
CONSIGNMENT PROCESS
Configuration setting for consignment process
Navigational Path: SPRO – IMG – Enterprise Structure – Assignment – Materials
Management – Assign Standard Purchasing Organization to Plant (this option is
used only for consignment): Click on execute.
 Enter plant info in the pop-up box and click on continue.
 Enter the Purchasing Organization for your plant. Press enter and save.
Create Consignment Purchase Info Record: Go to Transaction Code ME11.

 Enter information for creating the Info Record as discussed while creating PIR
previously. Press enter and save.
Create Consignment Purchase Order: Go to Transaction Code ME21N.

 Enter information for creating the Info Record as discussed while creating PO
previously.
 Enter 'K' in the Info Record type field before the Material field in the table.
 Press enter, click on check and if no errors, click on Post / save.
Create Goods Receipt: Go to Transaction Code 'MIGO'.

 Enter the Purchase Order info which was created earlier.
 Check the material, quantity and plant / storage location info.
 Check Item OK, click on check and if no errors, click on Post / save.
[Note: After goods receipt for consignment, the accounting document will not be
created as the goods are not for sale or do not reflect immediate monetary
value. But, stock will be updated in the 'For Consignment' stock column. To check
the consignment stock, go to Transaction Code MB54. Enter the material,
plant/storage location info and press enter. Stock is displayed in tabular format.]
Transfer Stock from Consignment to warehouse / storage location: Go to

Transaction Code 'MIGO'.
 Select A08 Transfer Posting; R10 Other & movement type 411K TP
consignment.
 In the Where Tab below, enter the required information in the FROM and
DEST columns.
 Check the Item OK check box, click on Check and if no errors, click on Post /
save.
[Note: After this, if we check the stock documents now, we will be able to see the
accounting document since material / good is now available for immediate sale
directly from storage location.]
14/08/2012
INDIRECT PURCHASE ORDER
Purchasing can broadly divided into the following 3 types.
1. Purchasing for Stock: Where the good / material is purchased primarily for
stock. It can also be called Direct Procurement or Made to Stock. This kind of
purchasing will update the inventory stock.
2. Purchasing for Consumption: Where the good / material is purchased for a

specific project / client / cost center. The customer / client who is going to
consume this stock is identified by the Account Assignment code, hence in this
kind of purchasing, account assignment is mandatory at the time of Purchase
Order creation. This is also called Made to Order or Indirect Procurement.
3. Purchasing of Services: For instance, painting, cleaning, housekeeping, electrical

repairs, etc.
Creation of Indirect Purchase Order: Go to Transaction Code ME21N.

 Enter all the info as per the Purchase Order process explained previously.
 Enter 'K' (indicates Cost Center) in the Account Assignment column which is
next to the Item column.
 Enter the cost center info in the Account Assignment tab at the bottom.
 Check the Item OK check box, click on Check and if no errors, click on post /
save.
Goods Receipt against Indirect PO

- Similar to the Goods Receipt process explained previously.
[Check the stock using transaction code MMBE both before & after creating the
Indirect PO. You will notice that the stock quantity for the material remains the
same.]
Purchasing of Services
1. Create a Service Master:
Navigational Path: SAP Easy Access – Logistics – Materials Management – Service
Master – AC03 – Service Master
 Double-click on AC03 and go to Create (blank sheet icon) at the top.
 Enter the name of the service in the Activity Number field.
 Select SERV in the Service Category field.
 Select hourly in the Base Unit of Measure field.
 Enter 007 in the Mat / Srv. Grp. field.
 Enter 3200 in the Valuation Class field.
 Enter a short description of the kind of service this field describes in the long
text field at the bottom. Click on save.
2. Create Service Conditions (i.e., charges for service): Go to Transaction Code

ML33 – Add, (ML34 Change & ML35 Display).
 Enter Purchasing Organization, Vendor and Plant info.
 Enter the service code created in the previous step and enter the amount,
validity dates. Press enter and save.
3. Create Service Purchase Order: Go to Transaction Code ME21N

[Note: Since it is service PO, account assignment is mandatory.]
 Enter the required details for creating the PO as explained earlier.
 Enter 'K' in the Account Assignment & 'D' in the Item Category fields after the
Item number column.
 Enter Service number and quantity in the Services tab at the bottom.
 Press enter and in the pop-up window enter 400000 as G/L account & cost
center info.
 Press enter again, check Item OK check box and click on Check button.
 If no errors, click post / save.
(If needed, we can also create a Purchase Requisition in similar way.)
 Release the Purchase Order just created.
4. Create Service Entry Sheet (similar to Goods Receipt for Material):
Navigational Path: SAP Easy Access – Logistics – Materials Management – Service
Entry Sheet – ML81N Maintain.
 Double-click on ML81N and click on Other Purchase Order button at the top.
 Enter the PO number created earlier in the pop-up window and click on
continue.
 Confirm the details of the PO loaded.
 If everything is correct, go to Entry Sheet option at the top – Create – Empty
Page.
 Enter the details of the service and click on 'Service Sel.' button at the
bottom.
 Check 'Adopt Full Quantity' check box in the pop-up window and click on
continue.
 Select the line item and click on copy 'Services' button at the top.
 Check the details and click on 'Accept' button at the top or 'Ctrl + F1' option.
We can confirm the services done by displaying the PO using Transaction Code
ME23N.
15/08/2012
PRICING PROCEDURE
This is primarily used to maintain purchasing price based on different
conditions/values. For maintaining the purchasing price, there are normally the
following three options.
- Purchasing Info Record (used 70% to 80%).
- Manually (rarely used).
- Pricing Procedure (used 20% to 25%).
Points to be noted in Pricing Procedure:

 Based on a vendor and purchasing organization, the system will determine
the pricing procedure.
 Each pricing procedure has different types for conditions/types like gross
price, discount, surcharge, etc.
 Each condition / type has unique Access Sequences.
 Each Access Sequence has 'n' number of Accesses.
 Each Access has 'n' number of Fields.
 Each Field needs to maintain Condition Records (where we actually
define/maintain dollar value).
For example: If purchasing price is dependent on Customer, Plant, Material and

Order Quantity, then Customer, Plant, Material and Order Quantity become the
Fields for the Pricing Procedure for that particular material for that plant.
i.e.
If, for Customer = C1 w.r.t “Plant = P1 and Material = M1 and Order Quantity =
100.” Then Price = Rs.1000.
This statement is called Conditional Record which defines the relation between
fields for determining the pricing.
Access is where we define the grouping of Fields for Conditional Records. For
instance, for the above example, Access can be set based on Customer & Plant or
Material & Order Quantity types together or any other combination of these
Fields.
To illustrate with an example:
 We define a ‘Pricing procedure’ depending upon the Vendor & the P.Org.
Condition Types Access Accesses
Sequence
A1—Plant + Material
Vendor If ZCT1 (Gross Price) ZAS1
(V1) A2—Order Qty + Mtrl
+ ZPP
+
Our P.Org
(COPO) is our ZAS2 A3—Vendor (10% disc)
ZCT2 (Discount)
Pricing
Procedure. A4—vendor + Material
 A1, A2, A3 & A4 are Accesses and their combinations are Condition Records.
 For Vendor V1 & P.Org COPO, if Plant & Material are the conditions, then
the Access is A1 & Access Seq. should be either ZAS1 or ZAS2 and price
should be ZCT1 + ZCT2.
Configuration of Pricing Procedure:

Navigational Path: SPRO – IMG – Materials Management – Purchasing –
Conditions – Define Price Determination Process
1. Create / Maintain Condition Table: Click on Execute.

 Double-click on 'Create Condition Table'.
 Enter user-defined table name (has to be a 3 digit number, can be from 501 -
999).
 Choose the fields to be considered in the table from the list on the right
(Plant & Material).
 Click on Generate button at the top and click yes to the pop-up.
 Check 'Local Object' in the pop-up window and click on save.
2. Define Access Sequence: Click on execute.
 Enter Access Sequence name (user-defined, 4 char Alphanumeric).
 Press enter and select the line item.
 Click on Accesses option on the left side and go to New Entries. Enter Line
Number (10) and Table Number (created in the previous step).
 Choose the line item and click on Fields on the left side.
 Confirm the fields created earlier are displayed here and click on save.
Similarly, define Access Sequence for Discount.
 In the maintain condition table, select '0006' option from the condition list.
 Click on 'Copy As' & rename the Access and click on save.
 Follow the steps in the 2nd step for creating the Access Sequence.
3. Define Condition Types: Click on execute.

 Double-click on define condition types.
a. Create Condition Type for Gross Price:
** Standard Condition Type for Gross Price is 'PB00' **
 Select 'PB00' and click on 'Copy As…' option from the top.
 Rename and change Access Seq. to the one you created earlier.
 Confirm the 'Calculation Type' is Quantity and 'Plus / Minus'
option shows Positive.
 If corrections in the invoice are not allowed, then select the
condition for Manual Entries.
 Delete the Pricing Procedure field. Press enter and save.
b. Create Condition Type for Discount:
** Standard Condition Type for Discount is 'RA01' **
 Select 'RA01' and click on 'Copy As…' option from the top.
 Rename and change Access Seq. to the one you created earlier.
 Check the fields to ensure everything is correct.
 Delete the Pricing Procedure field. Press enter and save.
4. Define Calculation Schema: Click on execute.
 Enter a Procedure Name (user-defined, 6 char alphanumeric) and
description.
 Press enter and select the line item.
 Click on Control Data on the left and go to New Entries.
 Enter the following in Step (Numbering), CTyp (Condition Type), 'Fro', 'To',
Calculation fields.
[10 – 0 – ZAS1 – Gross Price
20 – 0 – ZAS2 – Discount – 10
30 – 0 - <blank> - Net Price – 10 – 20 – 9]
16/08/2012
5. Define Schema Group: Click on execute.
a. Double-click on 'Schema Group, Vendors' and go to New Entries.
 Create a new Vendor Group (2 Char Alphanumeric) and give a
short description. Click on Save.
b. Double-click on 'Schema Group for Purchasing Organization.
 Go to New Entries and create a new Group name (4 Char
Alphanumeric) & short description. Click on Save.
c. Double-click on 'Assignment of Schema Group to Purchasing
Organization'.
 Go to your Purchasing Organization row and enter the Purchasing
Org Schema Group. Click on Save.
d. Assignment of Vendor Schema Group to Vendor Master.
 Go to Transaction Code XK02.
 Enter Vendor group name, company code & Purchasing
Organization.
 Check 'Purchasing Data' check box at the box and press enter.
 Enter the Vendor Schema Group name in 'Schema Group, Vendor'
field. Press enter and save.
[Note: Schema Group for Vendor + Schema Group for Purchasing Organization =
Pricing Procedure in this instance.]
6. Define Schema Determination: Click on execute.

 Double-click on 'Determine Calculation Schema for Standard Purchase
Orders' and go to New Entries.
 Enter the Schema groups for Vendor & Purchasing Organization and enter
the Pricing Procedure name.
7. Create Condition Records:

Purchasing – Master Data – Conditions – Other
(MEK1 Create; MEK2 Change; MEK3 Display).
 Click on MEK1 Create.
a. Enter Condition Type for Gross Price and click on Key Combination option.
 Select the 'Material / Value' radio button and click on continue.
 Enter the material number, vendor and price of material.
 Click on 'Scales' button at the top.
 Enter Scale Quantity and Price (ex. 100 Tons & above – Rs.180;
1000 Tons & above – Rs. 160). Press enter and save.
b. Enter Condition Type for Discount and click on Key Combination option.
 Select the 'Vendor' radio button in the pop-up and click on
continue.
 Enter Purchasing Organization, Vendor and discount percentage.
 Press enter and click on save.
8. Testing of Pricing Procedure: Go to Transaction Code ME21N.

 Create a new PO using the above material and vendor.
 To check Pricing Procedure, go to Conditions tab at the bottom & click on
'Analysis' button.
 The details of the Procedure will be shown in a pop-up window.
 Check Item OK check box and click on Check button.
 If no errors, click on Post / save.
17/08/2012
OUTPUT DETERMINATION (PRINTING)
For printing any document, we need to first design a layout on how that document
should look and what fields/information needs to be shown at what place in the
document. In SAP, this designing is possible with the SAP script or Smart Forms
done by ABAP.
Purchase Order Layout LOGO
To
<Vendor>
<Address>
<Address>
Sl.No. Material Plant Quantity Price
This information is adopted from the

Purchase Order by the Print Program.
xoxoxoxoxoxoxoxoxoxo
For creating this layout, MM consultants need to design the following process.
Purchase Order <-----------> Output Type ----------------------- Layout & Print Program.
The output determination/printing is determined/defined by the condition

technique. In general, most of the time, only purchase orders are sent or mailed
outside the company to vendors. So, we will now see how to configure the output
determination for Purchase Orders. The sequence/process is the same for output
determination of any other kind of document.
Configuration of Output Determination for Purchase Order:
Navigational Path: SPRO – IMG – Materials Management – Purchasing – Messages
– Output Control
1. Access Sequences: Define Access Sequences for Purchase Order.

 Click on Execute and click on continue for the 'cross-client table' pop-up.
 Select '0001' from the table and click on 'Copy As…' button at the top.
 Rename the sequence (4 Character Alphanumeric) and press enter.
 Select 'Copy All', click on continue and click on save.
 Select the line item and click on 'Accesses' option on the left side.
 You should see the list of items included in the Access Sequence listed.
2. Message Types: Define Message Types for Purchase Order.

 Click on Execute and double-click on 'Maintain Message Types for Purchase
Orders'.
 Select 'NEU' (which is the standard output type for Purchase Orders) option
from the list.
 Click on 'Copy As' and rename the output type (4 Character Alphanumeric).
 Change the access sequence to the one created above and press enter.
 Select 'Copy All' option, click on continue and click on save.
 Select the line item and click on 'Details button at the top.
 Go to Default Values tab and change dispatch time to 'Send Immediately',
Transmission Medium to 'Print Output' and Partner Function to 'VN
(Vendor)'. Click on save and click back button.
 Select the line item again and click on Processing Routines on the left side.
 Now, you see the Medium and Form details that are included with the
Output type.
 Click on save and once again, click on back button.
 Now, double-click on 'Fine-Tuned Control: Purchase Order'.
 Check for your Condition Type for Operations 1 & 2.
 If no entry, then go to New Entries and enter the following.
1: <Condition Type Name>
2: <Condition Type Name>
3. Message Determination Schemas: Define Message Schema for Purchase Order.
 Click on Execute and double-click on 'Maintain Message Determination
Schema: Purchase Order'.
 Select 'RMBEF1' (Standard Schema for PO) and click on 'Copy As…' button at
the top.
 Rename the Schema (6 Character Alphanumeric) and enter description.
 Press enter, select 'Copy All' option, click on continue and click on save.
 Select the line item and click on 'Control Data' option on the left side.
 Change <Step 10> Output Condition Type to your type and click on save.
 Click on back button and now double-click on 'Assign Schema to Purchasing
Organization'.
 Check for your purchasing organization(s) and enter the procedure name
created earlier. Press enter and save.
4. Partner Roles per Message Types: Define Partner Roles for Purchase Order.
 Click on Execute and enter the output type.
 Click on save and check if the output type is listed or not.
5. Assign Output Devices to Purchasing Groups:

 Click on Execute and Assign output device type (for now, LP01) to your
Purchasing Group. Press enter and click on save.
Creation of Condition Records for Output Type:

Purchasing – Master Data – Messages – Purchase Order
 Click on MN04 Create (MN05 Change; MN06 Display).
 Enter the Output Name and select the document type option.
 Enter Doc Type Function and Language (NB – VN – EN).
 Select the line item and click on Communication at the top.
 Enter Output device (LP01) and check 'Print Immediately' check box.
To test the output scenario, create a Purchase Order and before releasing the
Order, click on Messages tab & check the Print Preview option at the top. To check
the printout, go to SP01 and click on execute after entering the required info.
18/08/2012
SPLIT VALUATION
Split Valuation is used only for material valuation price. It will enable us to set
different valuation prices for the same material at same plant. To ensure this is
possible, we need to create different valuation types for each price point.
Configuration of Split Valuation:

Navigational Path: SPRO – IMG – Materials Management – Valuation & Account
Assignment – Split Valuation.
1. Activate Split Valuation: Click on Execute.

 Select 'Split Material Valuation Active' radio button. Click on Save.
2. Configure Split Valuation: Click on Execute.

(Press `cancel` on the first pop-up window.)
a. Creation of Valuation Types:
 Click on Global Types option at the top and go to Create.
 Enter Valuation Type (10 Char Alphanumeric - SLOCAL) and select
Ext. PO (2) & Acct Cat Ref (0001).
 Press enter and click on Create.
 Enter second Valuation Type (SIMPORT), select Ext. PO (2) & Acct
Cat Ref (0001).
 Press enter and click on Create.
 Press save and click on back button.
b. Creation of Valuation Category:
 Click on Global Categories & go to Create.
 Enter name (1 Char Alphanumeric), press enter and click on
Create & click on back button.
 Choose the Valuation Category just created and click on 'Types <--
-> Cat' button.
 Choose the Valuation Type created earlier and click on activate
button at the bottom.
 Click on 'Cat <---> OUs' (Organizational Units) button at the top.
 Choose the plant name and click on activate button at the
bottom.
3. Creation of Materials for Split Valuation:
a. Go to Transaction Code MM01.
 Create material as explained previously.
 In the Accounting 1 tab, Price Control field should be set to 'V'
(Moving Price) and Moving Price '1'.
 Set the Valuation Category to Category name we created earlier.
b. Go to Transaction code MM01.
 Again and choose same material as above.
 Select only 'Accounting 1' VIEW and enter valuation type (SLOCAL)
created earlier.
 Select Price Control 'V' & moving price '100'.
c. Go to Transaction Code MM01.
 Once again and choose same material as above.
 Select only 'Accounting 1' VIEW and enter valuation type
(SIMPORT) created earlier.
 Select Price Control 'V' & moving price '200'.
d. Go to Transaction Code MM60.
 Check for the material we just created.
You should see 3 different kinds of materials with the same name created but
only 2 with price.
To test the split valuation method: Create a Purchase Order for this material.
 Go to Transaction code ME21N and create a PO as explained previously.
 Enter the Valuation Type when prompted, press check and click on save.
 Create Goods Receipt for the PO just created.
 Go to Transaction Code 'MIGO' and enter PO number, check and save.
 Check the stock using Transaction Code 'MMBE'. The stock should be
reflected under 'On-Stock'.
 Goods Issue to Cost Center using Transaction Code 'MIGO' and again check
stock using 'MMBE'.
MM -- FI/CO INTEGRATION PROCESS
The main purpose of integration of Materials Management module with
Finance/Controlling is to get the G/L accounts updated automatically when
changes are made in MM. For this we need to have the following info/groups
updated.
1. Valuation Grouping Code: If we want to have different G/L accounts for each
plant, then we need to assign different valuation grouping codes to each plant. On
the other hand, if we want to have only one G/L acct for all plants, then we can
also assign only on valuation grouping code for all plants.
2. Valuation Class: This class will group the different material into categories for
G/L posting purposes. For instance, if we have 10,000 different materials then we
need to define / categorize them into different valuation types and assign each
valuation type to a valuation class. These classes cannot be assigned directly to the
materials it has to be done through the 'Account Category Reference' type.
Account Category Reference

Creation of Account Category Reference for each Material type – Assign Valuation
Class to Valuation Type – Assign Valuation Type to Account Category Reference.
Configuration of Account Category Reference

Navigational Path: SPRO – IMG – Materials Management – Valuation & Account
Assignment – Account Determination – Account Determination without Wizard
a. Define Valuation Control: Click on Execute.
 Select 'Valuation Grouping Code Active' radio button. Click on save.
b. Group together Valuation Areas: Click on Execute.

 Enter the valuation area (plant).
 Enter Valuation Grouping Code name (can be anything but the same has to
be used in G/L exactly).
c. Define Valuation Classes: Click on Execute.

1. Click on Account Category Reference
 Go to New Entries. (Here, we create one Account Category Reference
number for each material type.)
 Enter a new Account Category Reference code (4 Character
Alphanumeric) and a short description. Press enter and save.
2. Click on Valuation Class
 Enter a new Valuation Class name (4 char Alphanumeric) and enter
the Acct. Cat. Ref. created earlier. Press enter and save.
3. Click on Mat. Type / Acct. Cat. Reference
 Check for your material type.
 Enter the Account Category Reference created earlier against the
material type. Press enter and save.
(Finally, we have assigned Valuation Classes to the Material Type thru Acct. Cat.
Reference).
To test: Create a material with the material type referenced above. For this, go to
transaction code MM01 and complete setting up the material as explained
previously. Then, create a Purchase Order for the material created using
transaction code ME21N as explained previously. Now, when you do Goods
Receipt using transaction code 'MIGO' against the Purchase Order created, you
should get an error message which says "Account determination for entry INT BSX
___ ___ <valuation class name> not possible." This error occurs because we have
not yet assigned a G/L account to the valuation class we created earlier.
Assign G/L account to valuation class

When we do Goods Receipt, by default, SAP will propose three basic transactions
or transaction keys.
1. BSX for inventory posting.
2. WRX for GR / IR posting.
3. PRD for price difference posting. (Price difference is between
material master price and purchase order price provided Price
Control field in material master is maintained as 'S'. If the price
control field is maintained as 'V', then PRD will not be called.)
21/08/2012
d. Configure Automatic Postings: Click on Execute. (Click cancels on the pop-up
window.)
1. Double-click on BSX (Inventory Posting) and enter INT in the Chart of
Accounts pop-up window.
 Go to Rules at the top and select both Valuation Class and Valuation
Modif. & press enter.
 Enter the Valuation Modif. (Valuation Group code), Valuation Class and
G/L Acct. (300000). Press enter and click on save.
2. Double-click on PRD (Cost / Price Differences).

 Enter your Valuation Class at the bottom & G/L Acct in the next two
fields (281500) for Dr. & Cr.
3. Double-click on WRX (GR / IR clearing account).

 Normally, is maintained directly in the G/L account without any
valuation class requirement.
Now, go back to completing Goods Receipt using transaction code 'MIGO' against
the Purchase Order created earlier. It should be successful. To verify, check the
material and accounting documents.
When we do Goods Issue for any material, SAP will propose two transactions /
transactional keys.
1. BSX for inventory posting.
2. GBB for Offsetting Entry Posting. (GBB will have two general
modifiers – like sub-levels – VAX & VAY).
[Note: Transaction GBB will called in all P & L (profile & loss)
account transactions / entries.]
4. Double-click on GBB (Offsetting entry for Inventory Posting).

 Enter the Valuation modifier, general modifier (GBB), valuation class &
G/L Account.
General Modifiers for GBB
1. AUF – Goods Receipt for Purchase Orders.
2. BSA – Initial Stock Upload.
3. INV – Physical Inventory Differences.
4. VBO – Consumption from Stock to the material provided to Vendor
(Subcontracting).
5. VBR – Goods Issue to the Cost Center.
6. VNG – Scrapping of Material.
7. VAX / VAY – Goods Issue to the Customer through Sales Order.
General Modifiers for PRD

1. <Blank> - Goods Receipt against Purchase Orders.
2. PRF – Goods Receipt against Production Orders.
3. PRA – Goods Issue and other Movement Types.
22/08/2012
MATERIAL REQUIREMENT PLANNING (MRP)
With MRP, the system will inform / update the requirement based on preset
conditions and indicate when to order the material stock. It will create a planned
order, which will be turned into a Purchase Requisition or Production Order. For
instance,
Production Cost Center Customer
Req. = 500 Req. = 100 Req. = 200 Total Req. = 800
| | | Avlbl. Stock = 200
Material Requirement Planning Net Req. = 600
| Order Lot Size = 1000
Planned Order
| |
Purchase Requisition (by MM Consultants) Production Order (by PP Consultants)
Normally, in real-time, MRP is handled by PP consultants. But if PP is not being

implemented, then MM consultants will handle this.
I. MRP Methods / Types

MRP can be classified into two methods / types: MRP and Consumption Based
Planning (CBP).
CBP can be further divided into the following three types.
1. Re-order Point Planning (Manual and Automatic types).
2. Forecast Based Planning.
3. Time Phased Planning.
[Note: MRP is based on current requirement status whereas CBP is based on past
consumption pattern.]
To explain about Consumption Based Planning types, Re-Order Point suggests that
if stock falls below a certain preset stock level / condition, then the stock needs to
be re-ordered. In Manual Re-Order point, we will manually set the preset stock
level / condition whereas in Automatic Re-Order Point Planning, the system will fix
this level / condition. Forecast Based planning suggests stock ordering based on
previous consumption patterns. Time Phased Planning suggests seasonal ordering
levels, i.e., for summer, winter or rainy seasons the stock needs to be updated as
per the time of the year or season.
It is possible to run MRP at material-level, plant-level or MRP Area level. While
running MRP it will always check for Planning File where all the material
requirements are automatically updated. This file is automatically created if we
maintain MRP data for the material. It is not necessary to create a Planning File as
it would be auto created.
MRP Area is user-defined in case if the other two levels (material & plant) are not
sufficient to meet / calculate the requirement based on business needs.
II. MRP Group

It is a variable where we store some frequently used information required for MRP
data. For instance, Base Unit of Measure, Material Group, Order Unit, etc., if these
are frequently used having similar values then we can create a single MRP Group
for these values and suggest the Group every time we create a material.
III. MRP Controller

It is the Person / Department responsible to run MRP for a particular material /
group of materials.
IV. MRP Area

As explained earlier, it can be defined by the user if other two planning levels
(material & plant) are not sufficient. For instance, we can plan MRP on Storage
Location level. For this MRP Area can be defined to be the Storage Location level.
Configuration of Material Requirement Planning (MRP):

Navigational Path: SPRO – IMG – Materials Management – Consumption Based
Planning
A. Plant Parameters:
 Click on Carry out Overall Maintenance of Plant Parameters and click on
copy.
 Enter From Plant (1000) and To Plant (SDP1).
 Click on 'Copy' button and click 'Yes' in the pop-up window.
 Click on Maintain button and enter Plant (SDP1).
 Select Maintain in the Pop-up Window.
1. Click on Number Ranges.
 Click on Purchase Requisitions. Check and note the number range
indicator. Click on back button.
2. Click on MRP Controllers.
 Go to New Entries.
 Enter Plant, MRP controller code (3 char alphanumeric) & short
description. Also, any other info. Press enter, save and go back.
3. Click on Conversion of Planned Order to Purchase Requisition.
(Here, we maintain the maximum number of Planned orders to be automatically
converted to Purchase Requisitions).
 Enter the number, press enter and click on save.
 Click on back button.
4. Click on External Procurement.
(Here, we maintain purchase processing time, purchasing group and info on vendor
settings.)
 Enter the required info, press enter and click on save.
5. Click on Planning Horizon.
(Here, we maintain the number of days to be planned ahead for stock
procurement.)
 Enter the number of days, press enter and click on save.
6. Click on Available Stock.
(By default, unrestricted stock and quality inspection stock together is considered
as Available stock. Here, we can also suggest whether to take Stock-in transit,
blocked use & restricted use stock need to be considered as available stock or not.)
 Check the relevant check boxes and click on save.
B. MRP Groups Configuration:
1. Click on Carryout Overall Maintenance of MRP Groups.
 Enter Plant (SDP1) and click on copy button.
 Enter From Plant (1000), MRP Group (0010) and To Plant (SDP1),
MRP Group (SDM1).
** Default MRP group for Stock material is 0010 **
 Click on copy button in the pop-up window.
 Now, click on Maintain and enter the MRP group (SDM1).
 Click on Maintain again in the pop-up window..
(Here, we maintain document type for various documents like Purchase Order,
Subcontracting, Stock Transfer, etc.)
 Enter the required document type info and click on save.
2. Click on Define MRP Group for each Material Type.
 Enter Material Type; Plant and MRP group & click on save.
C. Number Ranges: Click on Define Number Ranges for Planning Run.

 Go to Intervals for Purchase Requisitions.
 Click on Change Intervals (the one with the Pencil symbol) and click on Insert
Interval at the top.
 Enter Number Range code along with the From - To Number range.
 Click on back button and click on Number Ranges for Purchase Requisitions.
 Enter the number range code just created to your plant and click on save.
D. Master Data:
1. Click on Define MRP Controllers.
 Enter the Plant info and click on save.
2. Click on MRP Types.

[Note: Standard MRP type is PD. Standard Manual Reorder Point Planning is VB
and standard Auto Reorder Point Planning is VM.]
 Check for the relevant MRP Type for your plant and click on save.
3. MRP Areas.
a. Click on Activate MRP for MRP Areas.
 Confirm the 'MRP is active' check box is selected and click on save.
(Default is checked.)
b. Click on Define MRP Areas.

 Enter MRP Area (10 character Alphanumeric) and MRP Area Type
(Storage Location).
 Enter Plant info and press enter.
 Now, enter Storage Location info and once again press enter &
click on save.
Planning – Activate Material Requirement Planning: Click on Execute.

 Click on Material Requirements Planning.
 Go to your plant and select the check box & click on save.
23/08/2012
After MRP configuration, we need to complete the following before running MRP.
Create Material with MRP VIEWS
 Go to Transaction Code MM01.
 Enter the required information to create a material as explained previously.
 Select MRP 1 and MRP 2 VIEWS in addition to the 4 VIEWS normally selected.
 In MRP 1 tab, enter VB (Manual Reorder Point Planning) in MRP Type field.
 Reorder Point suggests the minimum quantity required to be
maintained for the material.
 MRP controller is the one who is responsible for running MRP.
 Lot Size is the minimum quantity required to be ordered from the
vendor. This is a dynamic field.
(If we choose EX - Lot for Lot Quantity it would ensure that the material is ordered
after reducing the current stock on hand, whereas if we choose FX - Fixed Quantity
it will allow for the material to be ordered in the quantity specified or multiples
thereof of the quantity.)
 In MRP 2 tab, we need to maintain the shipping and delivery processing
times.
Check the planning file for MRP:

Navigational Path: SAP Easy Access – Logistics – Materials Management – Material
Requirement Planning – MRP – Planning – Planning File Entry MD20 Create (MD21
Display)
 Click on MD21 and enter material and plant info.
 Click on Execute. Check the info and click on save.
Create an MRP run

Navigational Path: SAP Easy Access – Logistics – Materials Management – Material
Requirement Planning – Planning – Total Planning [MD01 Online (plant-level);
MDBT Schedule as Background job.
 Click on MD03 Single-Item, Single-level.
[Note: For MD03, we do not need to maintain BOM; whereas for the other two,
we need to have BOM.]
 Enter material and plant info.
 Select the following options in the fields indicated.
o Processing Key : NETCH
o Create Purchase Requirement : 1
o Delivery Schedule :3
o Create MRP List :1
o Planning Mode :3
o Scheduling :1
 Press enter to run MRP.
[Note: Processing Key has two options - Net Change Planning & Total Planning.
Normally, Net Change is opted and is indicated by NETCH, which ensures every
time MRP is run the stock on hand is taken into account for calculating required
stock. The above options entered are called control data for MRP.]
To check the MRP results, go to Transaction Code MD04.

 Enter material and plant info & press enter.
 The MRP results are shown in tabular format.
QUOTA ARRANGEMENT
Quota Arrangement allows for distribution of stock requirement between different
vendors on percentage basis. For instance, if we have two vendors for a particular
material, then quota arrangement might be like 60% and 40%. For defining Quota
Arrangement, we need to first complete the following.
1. Create a Purchasing Info Record for two vendors using transaction code
ME11 for the material created during MRP configuration.
2. Maintain Quota Arrangement usage in the material master. Quota usage
option can be selected in the Purchasing VIEW for the material in the
material master. This usage indicates for what type of activity (purchase
order, purchase requisition, etc.) we are going to use this material for.
Select Option 4 which includes all scenarios.
Creation of Quota Arrangement (Transaction Code MEQ1)

Purchasing – Master Data.
 Click on MEQ1 Maintain (MEQ3 Display; MEQ4 Changes).
 Enter the Validity date and press enter.
 Choose the line item and then click on the Item button at the top.
 Enter the following information in the first two rows of the table.
F <blank> <vendor name> <blank> <blank> <70%>
F <blank> <vendor name> <blank> <blank> <30%>
 Enter 100 in the Maximum Lot Size column for both rows. Press enter & save.
Run MRP (using Transaction Code MD03)

 Enter the same Control Data as explained previously and press enter.
Check the MRP results (using Transaction Code MD04)

 Enter material and plant info to check the result.
Check Quota Arrangement status (using Transaction Code MEQ3)

 Select the line item and click on Item button at the top.
 Check and click on back button to exit.
AUTO CREATION OF SCHEDULE LINES USING MRP FOR SCHEDULING
AGREEMENTS:
Complete the steps in the following order.
1. Create a Schedule Agreement document (using Transaction Code ME31L) as
explained previously.
2. Create a Source List for the material and assign the scheduling agreement
number in the source list. Also, in the source list, select 'Need Schedule Lines
requirement' option in the MRP column.
3. Run MRP (using Transaction Code MD03). Ensure that in the control data, the
delivery schedules parameter is set as 3.
4. Check MRP results (using Transaction Code MD04).
5. Cross verify the results with Schedule Lines (using Transaction Code ME33L).
24/08/2012
LOGISTICS INVOICE VERIFICATION
This verification is a validation for payment against the material supplied / goods
received. This verification process will verify Purchase Order Quantity, Goods
Received Quantity and Invoice details. For instance, if the Purchase Order is for
100 pieces & Goods Received is only 40 pieces, then the invoice should be for only
40 pieces. If there is any discrepancy / error found in this verification or if stock or
payment amount does not match, then the invoice is blocked for further
verification. In real time this verification process is done by FI/CO consultants, only
10% to 15% of scenarios is it done by MM consultants.
Planned and Unplanned Delivery Cost
Planned delivery cost is the total amount of the invoice as per the Purchase Order
material price whereas unplanned delivery cost is the unexpected cost over and
above that shown in the Purchase Order. This can be anything related to shipping
of material and is captured in 'UPL' account in OBYC table. This unplanned cost can
be added to the invoice in two ways; one, shared as a weightage to the material in
the invoice or entered as a separate item and captured into a separate G/L
account.
Creation of Logistics Invoice Verification

Navigational Path: SAP Easy Access - Logistics - Materials Management - Logistics
Invoice Verification - Document Entry
 Click on Enter Invoice MIRO. (MIR7 Park Invoice; MRBR Release Blocked
Invoice).
 Go to Edit at the top and switch to your company code.
 Enter the required document information and Choose 'Q1 (10%)' in the tax
amount 2nd field.
[Note: If you get an error, ' In <company code>, number range '51' missing for
year 2012', then following the below steps.
Solution: Go to Transaction Code FBN1 and enter your company code.
- Click on Change Intervals and go to Interval Insert button at the top.
- Enter 51 2012 and the number range.
- Press Enter and click on save.]
(Note: Reference field refers to the vendor invoice number.)
 In Purchase Order reference tab at the bottom, choose 1 Reference to
PO/Scheduling Agreement. Enter the PO number and press enter.
 Check the 'Calculate Tax' check box above the tax amount field and press
enter.
 Now, you will see the total invoice amount in the top-right hand corner
which should be the same as invoice.
 Enter this amount in the 'Amount' field.
 Click on 'Simulate' button at the top and select accounting document option
in the pop-up window.
 You will now see three accounting entries for the invoice just entered as
given below.
o 'Credit to Vendor' in the first line.
o 'Debit to GR/IR account' in the second line.
o 'Debit to Input tax account' in the third line.
 Click on Payment tab at the top in which you see the option to block or
release the invoice for payment.
 Click on Details tab where we can enter the unplanned delivery costs, if any.
 After entering and checking all necessary information, click on save.
(Note: Standard document type for Invoice Verification is 'RE'.)
Transaction Code to display Invoice Document is MIR4 and to cancel the
document is MR8M.
Manual blocking of Invoice

 Go to Transaction Code 'MIRO' and enter the invoice document details as
above.
 Click on Payments tab and select 'Blocked for Payment' option in the
'Payment Block' field list.
 Click on simulate and if no error messages, click on save.
Release the Blocked for Payment document

 Go to Transaction Code 'MRBR' and enter company code.
 Select 'Release Manually' option in the Processing field.
 Select 'Manual Payment Block' in the Blocking Procedure field.
 Click on Execute.
 You will see the above blocked invoice displayed, select the invoice and click
on 'Release' button at the top.
 Click on save.
Holding / Parking of Invoice Document
[Note: Holding is for insufficient information in the invoice whereas parking is for
further / higher approvals.]
 Go to Transaction Code 'MIRO'.
 Enter the required info as explained earlier in completing the invoice
document entry.
 Click on 'Hold' button at the top. [or] Choose Edit -> Switch to Document
Parking option from the top.
 Click on save.
Releasing / Posting of the Parked Document

 Go to Transaction Code 'MIRO'.
 Go to Invoice Document -> Other Invoice Document option from the top.
 Enter the parked invoice document number and click on continue.
 Check and update the required information.
 Click on 'Post' button at the top and click on save.
[Note: For checking the total outstanding payment position, go to Transaction
Code FBL1N. Enter vendor and company code info & click execute to get the
information.]
25/08/2012
EVALUATED RECEIPT SETTLEMENT (Auto Invoice Verification)
Step 1: Maintain ERS setting in Vendor Master.

 Go to Transaction Code XK02.
 Enter the vendor, company code & purchasing organization info.
 Select the 'Purchasing Data' option at the bottom & press enter.
 Check GR-Based Inv Verification option.
 Select/check both 'AutoEvalGRSetmnt' Options.
 Click on save.
Step 2: Maintain Purchasing Info Record setting.

 Go to Transaction Code ME12.
 Enter Vendor, Material, Purchasing - Organization and Plant information &
press enter.
 Ensure that the 'No ERS' option is not checked. If checked, uncheck the
option.
 Click on save.
Step 3: Create a Purchase Order.

 Go to Transaction Code ME21N.
 While completing the Order, enter tax code (10%) under the 'Invoice' tab at
the bottom.
 Click check and if no errors, click on post/save.
Step 4: Release the Purchase Order.

 Go to Transaction Code ME29 N and release the Order created above.
Step 5: Do Goods Receipt against the Purchase Order.

 Go to Transaction Code MIGO.
 Choose Goods Receipt with Movement Type 101 and complete the GR as
explained previously.
Step 6: Run ERS process.
Navigational Path: SAP Easy Access - Logistics - Materials Management - Invoice
Verification - Automatic Settlement
o Click on 'MRRL Evaluated Receipt Settlement'.
o Enter company code, plant and vendor information.
o Click on 'Test Run' Check box. Click on execute.
o Check the results for accuracy.
o If correct and no errors, deselect 'Test Run' Check box.
For foreground execution: Click on Execute.
o Wait till system completes running the program.
o Once you get successful message, you will get the results automatically
displayed in tabular format.
o You will see the FI and Posting document numbers displayed.
For background execution
o Choose Program -> Execute in Background option at the top.
o Enter printer name (LP01 for now), select Immediate and click on
continue.
o Go to Transaction Code SM37 to check the background job status.
o Enter the required info and click on execute.
o Check for the date and time you created the job and click on it along with
the 'Spool' icon at the top.
o Click on Type button, the Reference Document is the invoice number
created by the system.
BATCH MANAGEMENT
Batch Management is more relevant and important for SD & PP modules than
MM. First In First Out (FIFO) is an important concept in Batch Management. Batch
Management determines which production batch the stock belongs to / comes
from. It is a further division of stock management.
Batch Number is a 10 character alphanumeric field which most of the time consists
of plant code, shift code, time and particular production batch code numbers. To
ensure that Batch Management is implemented correctly, stock should reflect as 0,
i.e., there should not be any stock for material which needs to have the Batch
Management implemented. If there is any stock, it should be transferred to a
dummy material type and after implementing Batch Management the stock can be
transferred back to its original material type.
Configuration of Batch Management Settings
Navigational Path: SPRO - IMG - Logistics General - Batch Management
Step 1: Specify Batch Level and Activate Status Management

 Click on Execute and click on Batch Level.
 Select ' Batch unique at material level' option and click on save.
 Click back button.
 Select ' Batch Status Management'.
 Select 'Active' option. (By default, option is active).
 Click on save and back button.
Step 2: Define Attributes of System Messages

 Here, we define which messages will be shown as Errors and which will be
only Warnings.
Step 3: Batch Number Assignment

 Click on Activate Internal Batch Number Assignment.
 Double-click on Activate Batch Number Assignment.
 Select Active option and click on save.
 Click on back button.
 Click on Maintain Batch Number Assignment Range.
 Enter Object name as 'OBJECT_CLT'.
 Click on 'Number Ranges' button at the top.
 Click on Maintain / Change Intervals and enter the required info, if needed.
 Click on save and back button.
Create a Material with Batch Management settings.

 Enter all required information and also select 'Batch Management' option in
Purchasing VIEW.
Creation of Batch Master
Navigational Path: SAP Easy Access - Logistics - Materials Management - Material
Master - Batch
 Click on MSC1N Create (MSC2N Change; MSC3N Display).
 Enter Material number and press enter.
 Input Batch Number and description.
 Press enter.
 Maintain Production Date, Shelf Life Expiry date and Available from date.
[Note: 'Batch Restricted' option indicates the particular batch cannot be used for
any purpose.]
26/08/2012
Create a Purchase Order
 Create a Purchase Order for the above material with Batch Management.
 Click check and if no errors, click on Post/save.
[Note: Most of the time, Batch Number / Name will be given at the time of GR
not at the time of creating a PO.]
Do Goods Receipt process

 Complete Goods Receipt with Purchase Order reference using 101
Movement Type. Click on save.
Do Goods Issue process

 Again go to Transaction Code MIGO.
 Complete Goods Issue to Cost Center using “201” Movement Type & save.
Batch Management with Classification [Note: This method is applicable for

configurable material type.]
Step 1: Creation of Characteristic.
 Go to Transaction Code CT04.
 Enter Characteristic Name (SCOLOR) and description (colors).
 Select 'Multiple Values' radio button in Value Assignment.
 Select 'Char' in Data Type field.
 Enter '10' in Number of Chars field.
 Click on Values tab at the top.
 Enter 2 types of characteristics (Blue and Red). Press enter and save.
Step 2: Creation of Class.

 Go to Transaction Code CL02.
 Enter Class Name (SCLASS) and select Class Type as '023'.
 Click on Create button on the right side.
 Enter a short description and go to Chars Tab.
 Enter the characteristic created earlier. Press enter and save.
Step 3: Create a material with Classification VIEW.
 Select the Classification VIEW along with the others.
[Note: Normally, for Classification Batch management, we choose 'KMAT
Configurable Material' material type.]
 In Classification tab, enter the Class name and choose the characteristic.
 Enter all required information and click on save.
Step 4: Create a Batch.

 Go to Transaction Batch MSC1N.
 Enter Basic Data 1 as explained earlier.
 In Classification tab, enter the Characteristic type. Press enter and save.
Step 5: Create a Purchase Order.

 Complete creating a Purchase Order as explained previously.
 Click on check and if no errors, click on save.
Step 6: Do Goods Receipt process.

 Complete the Goods Receipt process as explained previously.
 Click on check and if no messages/errors, click on save.
Step 7: Do Goods Issue process.

 Complete the Goods Issue process as explained previously.
 Click on check and if no message / error, click on save.
Step 8: Check Stock update.

 Go to Transaction Code MMBE.
 Check stock if properly updated or not.
MM  SD INTEGRATION
With this integration, it would become easier to distribute goods to customer
based on sales order / stock transport order directly from plant / storage location.
Enterprise Structure for SD
Company
MM side | SD side
| |
Company Code 1 Company Code 2
| | |
Plant 1 Plant 2 Sales Organization
| | | | |
Storage Storage Storage Storage Distribution Channel
Location 1 Location 2 Location 3 Location 4 |
Division
Note: Sales Organization, Distribution Channel and Division together make up the Sales Area.
Shipping Point (Point of Delivery to customer) is assigned to Delivery Plant.
Sales Organization is similar to Plant and Distribution Channel is similar to Storage Location.
Division is Line of Product (ex: Two-Wheeler, Three-Wheeler, Four-Wheeler, etc.).
Configuration of Sales and Distribution

A. Definition of Enterprise Structure
Navigational Path: SPRO - IMG - Enterprise Structure - Definition - Sales and
Distribution
Step 1: Creation of Sales Organization.
 Click on Define, Copy, Delete, Check Sales Organization.
 Double-click on Define Sales Organization.
 Enter Sales Organization name, short description and other details.
Step 2: Creation of Distribution Channel.

 Click on Define, Copy, Delete, Check Distribution Channel.
 Double-click on Distribution Channel.
 Enter Distribution Channel name (2 Char Alphanumeric).
Step 3: Creation of Division.
Navigation Path: SPRO - IMG - Enterprise Structure - Definition - Logistics General
 Click on Define, Copy, Delete, Check Division.
 Double-click on Define Division.
 Enter Name (2 Char Alphanumeric). Press enter and save.
Step 4: Creation of Shipping Point.

Navigation Path: SPRO - IMG - Enterprise Structure - Definition - Logistics Execution
 Click on Define, Copy, Delete, Check Shipping Point.
 Double-click on Define Shipping Point.
 Enter Shipping Point name (4 Char Alphanumeric). Press enter and save.
B. Assignment of Enterprise Structure

Navigational Path: SPRO - IMG - Enterprise Structure - Assignment - Sales &
Distribution
Step 1: Assign Sales Organization to Company Code
 Go to your Sales Organization in the list and enter your company code
against it. Press enter and save.
Step 2: Assign Distribution Channel to Sales Organization.

 Enter Sales Organization and Distribution Channel info. Press enter and save.
Step 3: Assign Division to Sales Organization.

 Enter Division and Sales Organization info. Press enter and save.
Step 4: Set up Sales Area.

 Enter Sales Organization, Distribution Channel and Division information.
Step 5: Assign Sales Organization - Distribution Channel – Plant.
 Enter Sales Organization, Distribution Channel and Plant.
Step 6: Assign Shipping Point to Delivery Plant.

Navigational Path: SPRO - IMG - Enterprise Structure - Assignment - Logistics
Execution
 Click on Find (binocular figure) button at the top.
 Enter your plant name and press enter.
 Double-click on plant name in the table.
 Select the shipping point from the drop-down list in the pop-up window.
 Click on continue and save.
Navigational Path: SPRO - IMG - Sales & Distribution - Master Data

Step 7: Maintain Common Distribution Channels.
 Go to Sales Organization.
 Enter the Distribution Channel for Conditions & Customer/Material Master.
Step 8: Maintain Common Divisions.

 Go to Sales Organization.
 Enter the Division for Conditions & Customer / Material Master.
[Note: The above two, common distribution channel and common division, are
needed at the time of pricing procedure conditions and creating customer/material
master. It normally includes all the distribution channels.]
C. Create Material Master
Step 1: Create a new material with Sales VIEWS.
 Create a new Material for FERT Finished Goods Material Type.
 Select Sales 1, 2 & General / Plant Data VIEWS along with the other 4 VIEWS.
 Enter plant, storage location, sales organization and distribution channel info
in the pop-up window.
 In Basic Data 1, ensure that Division and Weights are maintained.
 In Sales 1, maintain the Delivery Plant info.
 Under tax column at the bottom, select option '0 No Tax'.
 In Sales 2, maintain Item Category Group as 'NORM (standard)'. (The other
type is BANS Third Party Material).
 In Sales General/Plant Data, maintain the following info.
o Option '2' in 'Availability Check' field.
o Option '0001' in 'Transport Group' field.
o Option '0001' in 'Loading Group' field.
 Enter all the other required information for creating the material.
Step 2: Extend the above material to the second plant.

 Enter the above material name/number but enter the second plant & storage
location info.
 The rest of the information for creating the material at second plant is the
same as above. Press enter and save.
D. Maintain Stock for the material

 Go to Transaction Code MB1C and select 561 movement type for initial stock
upload [or]
 Go to Transaction Code MIGO. Choose A01 Goods Receipt; A10 Other; 501
Movement Type.
 Enter material, quantity and plant / storage location details.
 Press enter and click on check.
[Error: 'Acct. Determination for entry INT GBB <plant name> ZOB 7920 not
possible'.
Solution: Go to Transaction Code OBYC and double-click on GBB.
- Enter 'INT' in the Chart of Accounts pop-up.
- Enter '<plant name> - ZOB - 7920 - 399999 - 399999'
- Press enter and click on save.]
 Press check again and if no errors, click on Post / save.
E. Creation of Customer Master

Navigational Path: SAP Easy Access - Logistics - Sales and Distribution - Master
Data - Business Partner - Customer
 Click on XD01 Complete (VD01 Dummy Customer).
 Select Account Group as 'ZARG'.
 Enter your company code and sales area information & click on continue.
 Enter customer name, address and any other info.
 Press the next button at the top.
 Go to Account Management tab and enter '140000' in Account Reconciliation
field.
 Go to Sales Data tab and select '1 Standard' option in Customer Pricing
Procedure field.
 Go to Shipping tab and select '1 High' in Delivery Priority & '01' ASAP in
Shipping Condition fields.
 Go to Billing Documents and enter 'FOB' in Inco-terms field, '0001' in Terms
of Payment & '0' in Tax field. Press enter and save.
F. Shipping Point Determination: Formula: Shipping Condition + Loading Group +

Delivery Point / Plant = Primary Shipping Point
We get Shipping Conditions from Customer Master, Loading Group from Material
Master and Delivery Point / Plant from either Customer Master or Material
Master.
Configuration of Shipping Point Determination
Navigational Path: SPRO - IMG - Logistics Execution - Shipping - Basic Shipping
Functions - Shipping Point & Goods Receiving Point Determination - Assign
Shipping Points.
 Enter 01 - 0001 - <plant name> - <shipping point name> (note: shipping point
name is 4 char alphanumeric)
G. Pricing Procedure Determination: Formula: Pricing Procedure = Sales Area +
Customer Pricing Procedure + Document Pricing Procedure
Step 1: Assignment of Pricing Procedure.
Navigational Path: SPRO - IMG - Sales & Distribution - Basic Functions - Pricing -
Pricing Control - Define & Assign Pricing Procedures
 Double-click on 'Define Pricing Procedure Determination'.
 Enter 'SDSO - SD - SD - A - 1 - RVAA01' in the table.
(Sales org - Dist Channel - Division - Doc Pricing Procedure - Customer Pricing
Procedure - Standard Pricing Procedure)
Step 2: Maintain Sales Price (Condition Records)

 Go to Transaction Code VK11.
 Enter Condition Type as PR00 (Standard Gross Price).
 Select 'Customer/Material with Release Status' option in the pop-up and click
on continue.
 Enter the Material and amount in the table.
27/08/2012
H. Assign Shipping Plant to Vendor
 Go to Transaction Code XK02.
 Enter Vendor, Company and Purchasing Organization info.
 Select the Purchasing Data VIEW option at the bottom.
 Press enter and go to Extras -> Additional Data at the top.
 Enter the supplying plant info in the pop-up window. Press enter and save.
I. Maintain Stock Transport Order settings

Navigational Path: SPRO - IMG - Materials Management - Purchasing - Purchase
Order - Set Up Stock Transport Order
1. Define Shipping Data for Plants.
o Click on Execute.
o Select the receiving plant and click on Details button.
o Assign the customer number and click on save.
2. Create Checking Rule.

o Click on Execute.
o Check 'RP' is entered or not.
o If entered, click on save and back button.
3. Define Checking Rule.

o Click on Execute.
o Check if '02' and 'RP' are entered or not.
o If yes, click on save and back button.
4. Assign Delivery Type and Checking Rule.

o Click on Execute and go to New Entries.
o Enter 'UB - TMP1 - NL - RP' in the first row.
o Press enter and click on save.
5. Assign Document Type, One-Step Procedure, Under-delivery Tolerance

o Click on Execute.
o Go to New Entries.
o Enter 'TMP1 - TMP2 - UB' in the first row and check 'One-Step' check
box.
[Note: If the One-Step check box is checked, then it indicates that the stock
transport process will be one-step process and if unchecked will indicate two-step
process.]
J. Create Stock Transport Order Document

 In Document Type, select 'UB Transport Order'
 Enter Material, quantity, supplying plant and receiving plant information.
 Press check and if no errors, click on save.
K. Create an Outbound Delivery

 Go to Transaction Code VL10G (or VL10H).
 Enter Shipping Point in the first tab & Purchase Order number in the
Purchase Order tab.
 Select the line item and click on 'Create Background' button at the top.
 Click on back button.
 Go to Transaction Code ME23N and go to Purchase Order History & note
down the Delivery note info.
L. Change the Outbound Delivery

 Go to Transaction Code VL02N.
 Enter the Delivery Note number & press enter.
 Go to Pricing tab.
 Enter the Storage Location and Picked Quantity. Press enter
 Click on 'Post Goods Issue' button at the top.
M. Check Stock for both plants

 Go to Transaction Code MMBE.
 Enter supplying plant, material and company code info.
 Check the material stock status.
 Repeat the steps for the receiving plant also.
28/08/2012
LEGACY SYSTEM MIGRATION WORKBENCH

This workbench is used to upload non-SAP / legacy data into SAP system.
Normally, this process is used only when the amount of data is less. If amount of
data is more, then Batch Data Communication (BDC) system is used to upload the
legacy information. BDC is a part of ABAP.
For LSMW, we need to first configure the transaction code data in the same way
that we would be entering in the system in real-time. After that, we need to save
data in the same way / steps as we would enter the information in SAP system.
This can be saved in an excel file or as a Tab-delineated text file. Once you have
saved the file, follow the below steps.
Process to run LSMW:

 Go to Transaction Code 'LSMW'.
 Enter project name, Sub-project and object names.
 Click on create and enter a short description in the pop-up window.
 Click on continue in the pop-up window. Click on execute at the top.
Step 1: Maintain Attributes.

- Click on Execute.
- If not in changeable mode, go to Display -> Change.
- Select Batch Input recording option.
- Go to Recording Overview option at the top.
- Click on Create button.
- Enter the recording name and click on continue.
- Enter the Transaction Code you want to record and click on continue.
- Enter the data in the fields as you normally enter but make sure you do not
press the backspace or delete.
- Press enter on fields / pages where not required.
- When finished, click on 'Default All' button at the top.
- Click on save and click back button 2 times.
- Enter Recording name under Batch Input Recording.
- Click save and back button.
Step 2: Maintain Source Structure.
- Click on Execute.
- Click on 'Create Structure' button at the top.
- Enter Structure name and press enter.
- Click on save and back button.
Step 3: Maintain Source Fields.

- Click on Execute.
- Place cursor on structure name and click on 'Table Maintenance' button at
the top.
- Enter the corresponding field name without spaces in the first column (ex:
purch-org, acct-grp, order-curr, etc.)
- Enter data type and field length in the next two columns against the field
name.
[Note: To get data type and field length, go to the particular field in the
transaction code, place cursor on the particular field and press F1. Then, in the
help file click on Technical Info button. Double-click on Field name and note down
the data type and length allowed for the field.]
- Once done, press enter.
Step 4: Maintain Structure Relations.

- Click on Execute.
- Place cursor on Recording name and click on 'Create Relationship' button at
the top.
- If you get 'Source structure already assigned', then click save and back
button.
Step 5: Maintain Field Mapping and Conversion Rules.

- Click on Execute.
- Place the cursor on the Field name and click on 'Create Source Field' button
at the top.
- Double-click on corresponding source field name in the pop-up.
Step 6: Specify Files.

- Click on Execute.
- If file is on the desktop itself, then click on 'Legacy Data  On the PC
(Frontend)' button.
- If the file is located on another system in the network, we need to give the
correct location.
- Specify file location in the pop-up along with the delimiter information.
Step 7: Assign Files.

- Click on Execute.
- If the file is located on another system in the network, we need to give the
correct location.
- Place the cursor on the element name and click on 'Assign File' button at
the top.
- If it says already assigned, just press enter.
Step 8: Read Data.

- Click on Execute.
- Enter the number of records to view and click on execute again.
- You will see the list of entries in the file you save displayed.
- Check if correct and click on back button.
Step 9: Display Read Data.

- Click on Execute.
- Press continue button on the pop-up message.
- Check the information and click on back button.
Step 10: Convert data.
- Click on Execute.
- Enter the number of records to view and click on execute again.
- Check and click on back button.
Step 11: Display converted data.

- Click on Execute.
- Press continue button on the pop-up message.
- Check the information and click on back button.
Step 12: Create Batch Input session.

- Click on Execute.
- Enter the Batch Input name and click on 'Keep the batch input folders'
check box.
- Click on execute again and press enter on the confirmation pop-up
message.
Step 13: Run Batch Input session.

- Click on Execute.
- Select the session name we just created.
- Click on 'Process' button.
- Select either foreground or background processing and click on 'Process'
button again.
[Note: If selected foreground process, to come out of data processing, go to
System -> Logoff at the top. If you select background process, you will see a
message at the bottom saying background process is created.]
Step 14: Check the background job status.

- Go to Transaction Code SM37.
- Enter the required information like project name, subproject name, objects
name, etc.
- Click on execute.
- Check the status of your job.
(Normally, Legacy material master is uploaded using BDC whereas other master
data like vendor, customer, PIR, PO, etc., is uploaded using LSMW process. This is
based on the number of fields and records each master data type has.)
29/08/2012
BLANKET PURCHASE ORDER
A Blanket Purchase Order is mostly used for consumable goods, like plastic glasses,
tea bags, cups, etc., that have low monetary value. A Blanket Purchase Order will
have the following features.
- Low value material.
- Direct consumption goods.
- Order type will be 'FO Framework Order'.
- Account assignment will be either 'K Cost Center' or 'U Unknown'.
- Item Category will be 'B Limit'.
- We need to maintain validity dates for the Order.
- Also, need to maintain vendor information.
- Invoice verification is must but there will be no Goods Receipt since direct
consumption.
Step 1: Create a Blanket Purchase Order.

- Go to Transaction Code ME21N.
- Select 'FO Framework Order' in document type.
- Enter vendor and company information.
- Enter validity dates (From - To) in the fields.
- Enter 'K' in Account Assignment and 'B' in Item Category fields.
- No need to enter material number but enter a short description of the
material type.
- Enter Material Group (0107 Miscellaneous, for instance) and plant.
- Press enter and enter the limits (monetary value).
- Enter cost center information in the account assignment tab at the bottom.
- Press check and if no errors, click on post / save.
Step 2: Invoice Verification for Framework Orders.

- Go to Transaction Code MIRO.
- Check to ensure that the company code is yours.
- Enter 'Blanket Purchase Order' (or anything else) in the Reference field.
- Enter other required info including the PO number.
- Select layout option as '4_6310 Acct. Assignment, Cost Center'.
- Now, go to G/L account assignment tab at the bottom.
- Enter G/L Account number and amount in the fields.
- Press enter and enter the total cost displayed on the top right in the
'Amount' field at the top.
- Click 'Simulate' button and check the documents.
- If everything okay, click on save.
[Note: If you do not know the G/L account numbers, you can also go to Material
tab and enter material, plant & amount information in the table. Either option,
the total amount of all the columns should be reflected in the amount field at the
top right of the screen.]
SYSTEM LANDSCAPING
System landscaping refers to the system architecture followed by consultants
while implementing SAP at client place. Normally a 3-System landscape is
followed, in which 3 SAP R/3 systems are configured into one system. This is called
Transport Management System which is done by Basis consultants.
R/3 SYSTEM R/3 SYSTEM R/3 SYSTEM
Development Server Testing Server Production Server
In development, we can have different clients (like, 100 Customization, 200 ABAP
development, 300 Unit testing, etc.) but not on other servers. On the testing and
production servers we can only see the GUI / user screens not the customization
screens.
All the customization / development that a functional or technical consultant does
is stored or captured in the Transport Request, which has a 10 character
alphanumeric code. The transport request is transported from development server
to the testing server either by functional consultants or by basis consultants
whereas from testing to production server is done only by Basis consultants.
To transport the request, we use the Transaction Code SE09 or SE10.
ABAP
ABAP is programming the SAP system to get the end results that is not possible to
get by configuration / customization using the available transaction codes. This
process includes the following steps.
- Data Migration using BDCs.
- Reports.
- SAP Script / Smart Forms.
- Dialog Programming.
- Cross Applications.
- User Exits / BADIs.
In these, the first three are the ones consultants mostly use. Dialog Programming
is used to develop own transaction codes when client / company does not want to
use existing transaction code types. This type of programming is hardly used in
real-time (about 5%).
Cross Applications, like ALE / EDI, is a sort of programming to transfer data from
one SAP client to another SAP client or from one SAP client to another non-SAP
client. This is used mostly in cases where information needs to be sent to parties /
vendors / customers outside the company.
User Exits / BADIs are used to change the basic behavior of the standard SAP
programs to get the end result required by the client / company.
30/08/2012
Configuration of Inventory Management
Navigational Path: SPRO - IMG - Materials Management - Inventory Management
and Physical Inventory.
1. Plant Parameters.
o Click on Execute.
o Select '1000' company code from the list and click on 'Copy As…'
button at the top.
o Change the plant name to your own plant name.
o Select the line item and go to 'Details' button at the top.
o Here, we see different options listed for the plant.
o Check and save.
2. Define Attributes of System Messages.

o Click on Execute.
o Double-click on 'Settings for System Messages'.
o Here, we can change message type from Warning to Error and vice-
versa or even no message also.
o Check and save.
3. Number Assignment.
a. Define Number Assignment for Accounting Documents.
o Click on Execute.
o In the 'Set up Document Type' subgroup, click on 'Financial
Accounting Document Type'.
o Select 'RE Gross Invoice Receipt' line item and go to 'Details'
button at the top.
o Click on Number Range Information option.
o Enter Company Code and click on 'Interval Change' option.
o Now, select 'WA' type and click on 'Details' button at the top.
o Here, you will see the number range assignment.
o Check the number range exists as displayed in the first screen
and click on back button.
o In the 'Allocating Doc type to Transactions' subgroup, click on
'Goods Issue Doc type'.
o Do/check the assignment of document type to goods issue type
o Click on 'Goods Receipt Document Type'.
o Click on Physical Inventory Document Type.
o Click on Save and back button.
b. Define Number Assignment for Material and Physical Inventory

Documents
o Click on Execute.
o Click on Maintain Groups button at the top.
o Go to Groups -> Insert option at the top.
o Enter short description for the group, Year and From-To
Number range.
o Press enter and click on back.
o Assign number range just created to the document type.
o Click on save and back button.
c. Define Number Assignment for Reservations.

o Click on Execute.
o Click on Intervals button and then click on Maintain Interval
button.
o Set the interval and assign to document type.
o Click on save and back button.
4. Settings for Enjoy Transactions. [Note: These are settings for Goods
Movements (MIGO)]
a. Field Selection for MIGO.
o Click on Execute.
o Select the Required/Optional/Display/Suppress options for
different fields listed.
o Click on save and click on back button.
b. Field Selection per Movement Type.
o Click on Execute.
o Select Required/Optional radio buttons for each movement
type to be displayed for MIGO.
c. Settings for Transactions and Reference Documents.

[Note: Here we set the end-user restrictions for entries.]
o Click on Execute.
o Select MIGO and click on Transaction/Event option on the left.
o Select Active/Inactive options for the transactions to be
displayed for MIGO.
o Click on save and click on Reference Document on the left.
o Select which documents to be displayed for each transaction
that we select.
5. Physical Inventory: Define Tolerances for Physical Inventory Differences.

[Note: Here we define the inventory difference posting approval authority at user
level.]
 Click on Execute and click on 'Physical Inventory Tolerance Group'
button.
 Enter company code and a group name (user-defined, 4 Character
alphanumeric).
 Enter the monetary value allowed for the user group, per document
and per item.
 Click on save and click on back button.
 Click on 'User Name' button.
 Assign the group just created to particular user(s).
 Click on save and click on back button.
6. Movement Types (Transaction Code: OMJJ)

 Click on 'Copy, Change Movement Types' button.
 Click on the movement type and click on continue in the pop-up.
 Click on continue to the work area message.
 Select '101' movement type and click on 'Copy As…' button.
 Change the movement type name to user-defined one.
 Click on 'Copy All' option in the pop-up window and continue.
 Click on save.
 Double-click on the movement type just created.
 Modify any properties not required.
 Click on save.
ACCELERATED SAP METHODOLOGY (ASAP)

There are some guidelines that need to be followed by all consultants for
implementing SAP projects. This has been developed by SAP itself to simplify the
implementation process.
Step 1: Project Preparation/Project Initialization.

o Here, the consultants go to the client place, study the business model and
prepare the scope of the project.
(For instance, what to do, what is present, which module to use, where
to purchase, etc.).
Step 2: Blue Print.

o Here, the consultants prepare
1. An 'AS-IS' document which documents the process being followed
now.
2. A 'TO-BE' document which lists what is the end-result desired after
implementation and customizing.
3. Blue Print is a standardized 'TO-BE' document along with all
details/diagrams of the end result.
4. It also includes the customer sign-offs.
Step 3: Realization.
o Here, consultants start the customization/configuration of the system as
per the blue print. They will also do the unit testing, development
modules for ABAP and transfer to Testing Server.
o On the Testing Server they do the integration test, user acceptance test,
end-user testing and others to test viability.
Step 4: Final Preparation.
o In this step, before going live but after finalization of dates, all the data
(Customization, ABAP development, Master Data & Transaction Data) is
uploaded one-by-one to the Production Server and initial usage by “End-
user” takes place.
Step 5: Go Live.
o Here, all systems go live and end users need to complete all transactions
in SAP.
Step 6: Support (for about 1 to 2 months or more, depending on client need).

o Here, consultants support the project where any errors, either human or
code, is analyzed and rectified by the Consultants creating/raising service
tickets to be solved.
o In support projects, we normally have two types of request: Service
Request and Change Request.
o Service Request is one which is raised by the end user if any transactional
error, which the onsite consultant can rectify without any change to the
system/project deployed. On the other hand, Change Request is one
which is raised by the consultants themselves when the transactional
error cannot be rectified without some kind of project/system change.
SOME IMPORTANT TABLES IN MM

MARA - Material Master General data.
MARL - Plant data.
MARD - Storage Location data.
LFA1 - Vendor Master General data.
[Note: The first four tables are the most frequently used ones and cover material
& vendor master data.]
EKAO - Purchasing Header data. ``````````````````````````}

EKPO - Purchasing Item data.__________________} Together, are for Purchasing.
MEPF - Material Document Header data. ```````````````}
MSEG - Material Document Item data._________} Together, are for Inventory
management.
Topic Areas
1. SAP – Overview (+)

 SAP navigation
 Management Empowered by mySAP ERP
 Procure-to-pay
2. Procurement Process (++)

 Purchase requisitions
 Purchase orders
 Requests for quotations
 Procurement for stock
 Procurement for direct consumption
 Subcontracting
 External services
 Reporting
3. Master Data (+)

 Material master
 Vendor master
 Purchasing info records
 Source list
 Quota arrangement
 Messages
4. Purchasing Optimization (++)

 Contracts
 Scheduling agreements
 Invoicing plans
 Document release procedure
 Purchasing document configuration

5. Inventory Management (+++)
 Goods receipts
 Goods issues
 Stock transfers
 Reservations
 Consignments
 Physical inventory
 Availability check
 Transaction types
 Messages
6. Valuation and Account Determination (+)

 Material valuation
 Price control
 Account determination
 Split valuation
7. Material Requirements Planning (+)

 Reorder point planning
 Lot-size calculation
 Planning run
 Planning result
8. Logistics Invoice Verification (++)

 Invoices
 Credit memos
 Automatic settlement
 Invoice verification in the background
 Adjustments
 Freight invoices
 Blocked invoices
 GR/IR clearing account maintenance

9. Configuration of the Enterprise Structure and the Material
Master (+)
 MM organizational levels
 Material type
 Field selection
10. Solution Manager (+)

 Overview of the Solution Manager
11. Experience from Implementation (Case Study or Project)*

(+)
 Design of enterprise structures (organizational levels in
mySAP Business Suite)
 Integration and dependencies
“*” = Cross-subject implementation and integration knowledge is

tested in subject area 11. Implementation and integration
knowledge referring to a special subject (such as goods receipt)
is tested in the relevant subject (such as inventory
management).
Amount of questions by topic (as a percentage of the test):

+ = 1 - 10%
++ = 11 - 20%
+++ = over 20%
No responsibility is taken for the correctness of this information.
Copyright © SAP AG 2006.

SAP MM Notes

Diunggah oleh

Informasi Dokumen

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

SAP MM Notes

Diunggah oleh

Hak Cipta:

Format Tersedia

12 /07/2012

MM – Enterprise Structure – Master Data – Purchasing – Inventory

Purchasing: 1. Purchase Requisition

Others: 1. Subcontracting Process

Company code – level at which the profit / loss account is created/maintained.

Based on client requirement / business, we create the blueprint.

Configuration of Enterprise Structure:

Creation of Storage Location:

 Assign Plant to Company Code:

 Assign Purchasing Organization to Company Code:

 Assign Purchasing Organization to Plant: Navigational Path:

Company Code Settings for Material Management:

CHANGE MATERIAL MASTER (Tc = MM02):

DISPLAY LIST OF MATERIAL BY PLANT (MM60):

EXTEND MATERIAL FROM ONE STORAGE LOCATION TO ANOTHER (MMSC):

CONFIGURATION OF MATERIAL MASTER:

CHANGE MANDATORY FIELD TO OPTIONAL FIELD AND VICE VERSA IN MATERIAL

** SETTINGS FOR MATERIAL TYPE (VERY IMPORTANT STEP TO ENSURE MATERIAL

CREATION OF MATERIAL TYPE:

Define Attributes for System Messages: Click Execute

CREATION OF MATERIAL GROUP:

CREATION OF PURCHASING GROUP:

2. Define Screen Layout Specific to Purchasing Organization:

3. Define Transaction-Dependent Screen Layout:

CHANGE VENDOR MASTER (Tc = XK02):

DISPLAY VENDOR MASTER (Tc = XK03):

FLAG FOR DELETION (Tc = XK06):

DISPLAY LIST OF VENDORS: By Purchasing Organization

PIR - PURCHASING INFO RECORD (OR SIMPLY, INFO RECORDS):

CONFIGURATION OF PURCHASE INFO RECORD:

2. Define Screen Layout: Click on Execute.

CREATION OF SOURCE LIST:

CONFIGURATION OF SOURCE LIST:

MATERIAL MANAGEMENT TRANSACTION DATA

CREATE / MAINTAIN QUOTATION:

CREATION OF PURCHASE ORDER MANUALLY:

CHANGE PURCHASE ORDER (Tc = ME22N):

GENERAL ANALYSIS FOR PURCHASE ORDER (Tc = ME80FN):

CREATION OF RELEASE ORDER AGAINST CONTRACT:

DISPLAY CONTRACT STATUS:

CREATION OF SCHEDULE LINE MANUALLY:

Step 2: Convert Purchase Requisition to Purchase Order

Step 4: Vendor sends Goods to the company (Goods Receipt)

Step 5: We perform Invoice processing or ERS (evaluated receipt settlement).

Step 2: Maintain Auto PO setting for Vendor Master.

Step 3: Create Purchase Requisition.

Step 4: Assign Vendor to Purchase Requisition.

RELEASE PROCEDURE (Approval Process): Applicable for any kind of Purchase

Step 2: Create a Class to store the Characteristics.

Step 5: Release Indicators (indicates the approval status, whether blocked or

CONFIGURATION OF RELEASE PROCEDURE:

3. Define Release Procedure for Purchase Order: Click on Execute.

c. Click on Release Indicators:

d. Click on Release Strategy.

2. Define Purchasing Value Key: Click on Execute.

Navigational Path: SPRO – IMG – Material Management – Purchasing – Vendor

5. Check Inco-terms: Click on execute.

6. Configuration of Purchasing Info Record - Completed.

7. Configuration of Source List - Completed.

8. Configuration of Quota Arrangement: Quota arrangement defines the

Navigational Path: SPRO – IMG – Material Management – Purchasing – Quota

B. Define Quota Arrangement usage: Click on execute.

b. Define Document Types: Click on Execute.