SAP MM Interview Questions & Answers for Freshers

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1.IntroductiontoSAPMM

1. WhatisSAP?Howisitusedinindustries?

SAPisthemostpopularenterpriseresourceplanning(ERP)softwareapplicationusedtoprovideenterprise
businesssolutions.Itwasfirstintroducedin1972inMannheim,Germany.SAPstandsforSystems,Applications,and
ProductsinDataProcessing.

SAPprovidescompletebusinesssolutionsbyintegratingvariousbusinesstaskssuchassales,purchase,and
production.SAPtakesinformationfromonebusinessprocessandincorporatesitintoanotherbusinessprocess,therebyspeeding
upallbusinessprocesses.Forexample,informationabouttherawmaterialinstockisusedbytheproductiondepartmentto
determinehowtoprepareproducts.

SAPiswidelyusedinvariousindustriesbecauseasitupdatesandprocessesimportantdataveryquickly,it
canautomatebusinessprocessesandproviderealtimesolutionsforbusinesses.
2.BrieflydescribethehistoryoftheSAPsoftware.

TheSAPsoftwarewasdevelopedbyacompanyofthesamename.SAP(thecompany)wasfoundedin1972by
fiveformerIBMemployees:DietmarHopp,HansWernerHector,HassoPlattner,KlausTschira,andClausWellenreuther.

SAPreleaseditsmainframeproduct,calledSAPR/2,in1979.Theclient/serverversionoftheSAP
software,calledSAPR/3,wasreleasedin1992.Today,SAPisthelargestvendorofstandardbusinessapplicationsoftware.

SAPconstantlydeliversscalablesolutionstoitscustomers,allowingthemtorespondtodynamicmarket
conditionsandhelpingthemtomaintainanadvantageovertheircompetitors.SomeofthemajorSAPapplicationspresently
availablearedefinedinquestion4andincludeSAPR/3,mySAPERP,mySAPCustomerRelationshipManagement(CRM),
mySAPSupplierRelationshipManagement(SRM),mySAPSupplyChainManagement(SCM),andmySAPProductLifecycle
Management(PLM),tonameafew.
3.WhatismySAPERP?Whataretheotherbusinesscomponents?

mySAPERPisthenextgenerationERPapplicationfromSAPAGinGermany,andwasfirstlaunchedin
2003.ThemySAPERPapplicationhasallthefeaturesofpreviouslyreleasedSAPERPsoftware,suchasSAPR/3andSAP
StrategicEnterpriseManagement(SEM),alongwithitsownextensions.ThemySAPERPapplicationprovidesecommerce
solutionsbyusingWebtechnology.ThemySAPERPapplicationhasthefollowingadvantages:

o Mobileinfrastructure,whichimprovesworkforcemobility
o Transparencythroughabusinessintelligenceframework
o Deliveryofpeoplecentricservices
o Fasteraccesstoinformation,whichfacilitatesquickdecisionmaking
o Seamlessintegrationofprocessesthroughoutthebusiness
 mySAPERPincludesthefollowingproducts:

o mySAPEnterpriseResourcePlanning(ERP)
o mySAPSupplyChainManagement(SCM)
o mySAPSupplierRelationshipManagement(SRM)
o mySAPCustomerRelationshipManagement(CRM)
o mySAPProductLifeCycleManagement(PLM)

mySAPR/3canbeclassifiedintothefollowingbusinesscomponents:

o Financialapplications
o Humanresourceapplications
o Logistics
o Salesanddistributionapplications
4.WhataretheindustryspecificsolutionsavailableinmySAP?
ThemySAPERPapplicationprovidesbusinesssolutionsforalmosteveryindustry,includingautomotive,chemical,andmedia.
VariousindustryspecificsolutionsavailableinmySAPincludethefollowing:

mySAPAutomotive
mySAPAerospaceandDefense
mySAPConsumerProducts
mySAPBanking
mySAPChemicals
mySAPHighTech
mySAPEngineeringandConstruction
mySAPHealthcare
mySAPHigherEducationandResearch
mySAPInsurance
mySAPMedia
mySAPOilandGas
mySAPMillProducts
mySAPMining
mySAPPublicSector
mySAPPharmaceuticals
mySAPServiceProviders
mySAPRetail
mySAPTelecommunications
mySAPUtilities
5.WhatisSAPR/3?
 SAPR/3isanERPsoftwarethatwasofficiallylaunchedin1992.ItisareplacementfortheSAPR/2mainframe
computingbasedERPsoftwareandisbasedonclientservercomputing.Withtheadventofclientservercomputing,SAPAG
inGermany(founderoftheSAPERPsoftware)launchedSAPR/3toprovideclientserverbasedrealtimebusinesssolutions.
Theletter"R"inSAPR/3representstherealtimebusinessdataprocessing,whilethenumber"3"representsthethreetiersin
clientservercomputing.
Thethreetiersinclientservercomputingare:presentation(client),application(businesslogic),anddatabase(storesthe
actualbusinessdata).
SAPR/3integratesvariousbusinessareas,suchassales,purchase,andprocurement,byusingdifferentfunctional
modules,suchasMaterialsManagement(MM),SalesandDistribution(SD),Financial(FI),Controlling(CO),andHuman
Resource(HR).
DifferentversionsofSAPR/3include3.1i,4.0b,4.5b,4.6b,4.6c,ECC5.0,ECC6.0;thelatestversionisECC6.0.
6.HowdifferentversionsofSAPevolved?

Sinceitsinception,SAPhascontinuedtosupportchangingbusinessprocessesandtoadaptitselftotheneedsoforganizations.
Inordertosupportthemostcurrentbusinessstrategies,SAPhasevolvedovertimeandprogressedthroughthefollowing
versions:
SAPR/1ThiswasthefirstversionofSAPandwasdevelopedforfinancialaccountingsystems.Thisversionisno
longeravailable.

SAPR/2ThiswasthesecondversionofSAP.ItreplacedtheR/1versioninthe1970sandwasamainframebased
businessapplication.SAPR/2supportedmultiplecurrenciesandlanguagestohelpinternationalizebusinessmanagement.This
versionisalsonolongeravailable.
SAPR/3ThisversionreplacedSAPR/2,addingsupportforclientserverbaseddistributedsystems.Thisnewversionof
SAPismultiplatformed,meaningitcanbeinstalledandusedonmultipleplatforms,suchasWindowsorUNIX.
7.WhyareindustryspecificsolutionsusedinSAPR/3?

IndustryspecificsolutionsareusedintheSAPR/3ERPapplicationinordertoautomatevariousbusinessprocessesfor
almosteveryindustry,includingautomotive,oilandgas,andchemical.Byautomatingbusinessprocesses,theSAPR/3
applicationhelpsorganizationsmeetthefollowingchallenges:

o EmergingmarketsEarningrevenueinemergingmarkets
o CompetitionMaintainingsuccessfulbusinessoperationsinaworldoffiercecompetition
o IncreasingdemandsHandlingincreasingandvaryingcustomerdemands
o LaborissuesSolvingtheproblemsthatariseforbusinessoperationsrequiringefficientskilledlabor
o WorkforceshortagesSolvingtheproblemofashortageofskilledpersonnel
Theimportanceofindustryspecificsolutionscomesfromaverybasicfoundationofthought:everytypeofbusinessis
uniqueandthereforeneedstobecateredtoaccordingly.Thesamephilosophymaynotbeapplicableforautomotivebusinesses
andintegratedsteelplants,becausebothrequireentirelydifferentapproachestobusinessplanning.Theautomotiveindustryis
basedontheassemblingofequipmentandpartsdiscretemanufacturing,whereastheintegratedsteelplantisacontinuous
manufacturingunit.Therefore,eachbusiness'sfunctionalitiesaredifferentinareassuchasproductionandinventory
management.
8.WhatbenefitsareenvisagedafterimplementingSAPinanyorganization?

AftertheinstallationofSAPR/3inanorganization,thefollowingchangeswilloccur:
Improvementinprojectmanagementandprojectexecutioncapabilities
Integrationofsuppliersandsubcontractors
Optimizationofsalesordercapabilities
Comprehensivebusinesssupportspecifictoaparticularindustrytype
Minimalcostofownership
Uniformityofbusinessprocesses
Abilitytomakesafestrategicchoices
9.WhatarethedifferentModulesinSAPR/3?

Tointegratevariousbusinessprocesses,SAPR/3comeswithvariousmodules,suchasMM,SD,andCO.Thesemodulesare
furthergroupedintovariousbusinessfunctionalareas.ThefunctionalareasandtheSAPR/3modulesinthosefunctional
areasareasfollows:

FinancialapplicationsDealswithanorganization'sfinancialmatters,suchaspreparingandanalyzingfinancial
documentsandreportingthedocumentoutputtotheappropriateauthoritiesforfurtherprocessing.Tomanageallthese
concerns,thefollowingSAPR/3modulesaregroupedinthisfunctionalarea:

o FIFinancialAccounting

o COControlling

o ECEnterpriseControlling

o IMInvestmentManagement

o TRTreasury

HumanresourcesDealswithdocumentsrelatedtoanorganization'shumanresourcesdepartment.TheSAPR/3
modulesgroupedinthisareahelpanorganizationtomanageprocessessuchassalarycreationanddistribution,employees'
payrollacrosstheorganization,andtransferringdatatootherrelevantdepartments,suchasfinance.Thisareaconsistsofthe
followingmodules:
o PersonnelManagement
o TimeManagement
o Payroll
o TrainingandEventManagement
o OrganizationalManagement
 LogisticsapplicationsThisisthelargestareacoveredbySAPR/3.Thisareahelpsmanagebroadlevelbusinessprocesses
suchassalesanddistributionofproducts,materialsmanagement,productionplanning,andqualitymanagement.Thisarea
consistsofthefollowingmodules:

o MMMaterialsManagement
o SDSalesandDistribution
o PPProductionPlanning
o PMPlantMaintenance
o LOLogistics
o QMQualityManagement
o PSProjectSystem
o WMWarehouseManagement
10.WhatarethecorefunctionalitiesoftheSAPsystem?
ThecorefunctionalitiesoftheSAPsystemareSalesandDistribution(SD),MaterialsManagement(MM),Financial
Accounting(FI),andProductionPlanning(PP).Inthefirstphase,companiesimplementtheSAPsoftwarewiththesecore
functionalities.Later,inthesecondandthirdphases,theymayalsointroduceotherfunctionalities,suchasControlling(CO),
WarehouseManagement(WM),andHumanResource(HR).However,thetypesofmodulesandthephasingofimplementation
dependssolelyonthetypeofindustryinwhichtheclientworks,aswellastheorganization'sreadinessandtheurgencywith
whichtheintegratedenterprisesystem,suchasSAP,mustbeadopted.
11.HowcanyoudefineanMMmodule?WhatisitsimportanceinSAPR/3?

MMstandsforMaterialsManagementandisapartoftheLogisticsfunctionalareaofSAPR/3.ItisanimportantSAPR/3
modulebecauseithelpsmanagebroadlevelbusinessactivities,suchasprocurement,valuationandassignment,batch
management,andmaterialsstorage.Sincematerialsarethemostpreciousresourceofanorganization,extremecareneedstobe
takeninalltheprocessesrelatedtomaterialsmanagement.EfficientmaterialsmanagementistheessenceoftheMMmoduleof
SAPR/3.
12.HowistheMMmoduleintegratedwithothermodulesofSAP?

TheMMmoduledealswithmaterialsprocurementonthebasisoftheproductionrequired;therefore,itislinkedwiththe
PPmodule.

TheSDmoduleisproportionallyrelatedtotheMMmodule,becauseitusesinformationaboutthequantityofmaterial
sentforproduction.

TheWMmoduleisrelatedtotheMMmodule,becausetheMMmodulemaintainsinformationaboutmaterialsstorage
andmaterialstransfersinsideanorganization.

TheFImoduleisalsorelatedtotheMMmodule,becauseeveryoperationperformedintheMMmoduledirectlyimpacts
thefinancialprocessesoftheorganization.
13.WhatarethemaincomponentsoftheMMmodule?HowarethesecomponentsusedinSAP?
 TheMMmoduledealswithmaterialsprocurementonthebasisoftheproductionrequired;therefore,itislinkedwiththe
PPmodule.

TheSDmoduleisproportionallyrelatedtotheMMmodule,becauseitusesinformationaboutthequantityofmaterial
sentforproduction.

TheWMmoduleisrelatedtotheMMmodule,becausetheMMmodulemaintainsinformationaboutmaterialsstorage
andmaterialstransfersinsideanorganization.

TheFImoduleisalsorelatedtotheMMmodule,becauseeveryoperationperformedintheMMmoduledirectlyimpacts
thefinancialprocessesoftheorganization.
2.OrganizationalStructure

1. WhatistheorganizationalstructureintheMMmodule?

TheorganizationalstructureintheMMmoduleisahierarchyinwhichvariousorganizationalunitsarearrangedaccordingto
theirtasksandfunctions.Thedifferentorganizationalunitsthatconstitutetheorganizationalstructureofthecompanyareas
follows:

ClientAselfcontainedunitintheSAPsystemwithseparatemasterrecordsanditsownsetoftables.

CompanycodeThesmallestorganizationalunit.Youcancreateanindependentsetofaccountsforthisunitforthe
purposeofexternalreporting.

PlantAnorganizationalunitwherematerialsareproducedorgoodsandservicesareprovided.Youcandividean
enterpriseintovariousplantsaccordingtoproduction,procurement,maintenance,andmaterialsplanning.

StoragelocationAnorganizationalunitwherethegoodsproducedintheplantarestored.

WarehousenumberAnalphanumerickeythatrepresentsawarehousingsystem,whichismadeupofdifferent
organizationalandtechnicalstorageareas.

StoragetypeAnareasuchasagoodsreceiptarea,goodsissuearea,orpickingarea.Alsothephysicalorlogicaldivision
ofacomplexwarehouse.

PurchasingorganizationAnorganizationalunitthatprocuresmaterialsandservicesandnegotiateswithvendorsto
purchasematerialsorgoods.

PurchasinggroupAnalphanumerickeyforabuyeroragroupofbuyerswhoareinvolvedinpurchasingactivities.The
purchasinggroupisresponsibleformaterialsprocurementanddealingwithvendors.
2.WhatarethelevelsoforganizationalunitsofEnterpriseStructureinR/3?
TheclientisthehighestlevelunitoftheorganizationalunitsinEnterpriseStructureinSAPR/3.Theclientisfollowedbythe
companycode,whichrepresentsaunitwithitsownaccounting,balance,andprofitandloss(P&L).Thenextlevelof
organizationalunitsinEnterpriseStructureistheplant,whichrepresentsanoperationalunitofacompany.
3.DefineClient.WhatisitsimportanceinSAP?

Aclientcanbedefinedasaperson,company,ororganizationthatpurchasesgoodsfromanotherperson,company,or
organization.IntermsofSAP,aclientisdefinedasaunitthathasitsownmasterrecordsandasetoftables.Theclientis
importantinSAPbecauseitstoresandmaintainsdataabouttheorganizationwhereSAPisimplemented.
4.HowtocreateaclientinMMmodule?

YoucancreateaclientintheMMmoduleeitherbyusingthetransactioncodeSCC4orbyperformingthefollowingsteps:

SelectSAPMenu>Tools>Administration>Administration>ClientAdministration.

DoubleclickSCC4ClientMaintenance.ThedisplayviewClients:Overviewscreenappears.

SelectDisplay>Change.Theinformationdialogboxappears.

ClickContinue.ThechangeviewClients:Overviewscreenappears,whereyoucancreateanewclient.
5.Definecompany.Howisitdifferentfromaclient?WhatarethedatainMMthatare
maintainedatthecompanycode
level?

Acompanyisanorganizationalunitforwhichindividualfinancialstatementsaredrawnpertherelevantcommercial
laws.Acompanyconsistsofoneormorecompanycodes.Withinacompany,allcompanycodesmustusethesametransactions
inadditiontothesamefiscalyearbreakdown;however,companycodecurrenciescanvary.

Acompanyisdifferentfromaclientbecauseaclientcanitselfbeacompany,oranorganizationthathasmultiple
companies.Forexample,theowneroftheentireSAPsystemisaclient.Thesystemwillhaveonlyoneoperationalclient,but
theclientmayfurtherhaveagroupofcompanies.Thefollowingdataareheldatthecompanycodelevel:

o Materialnumber
o Classificationdata
o Multilingualdescription
o Unitsofmeasure
o Technicaldata
6.HowtocreateacompanycodeinSAP?

InSAP,acompanycodeiscreatedusingthetransactionOX02.Thecompanycodefieldisrepresentedbyafourcharacter
alphanumericstring.YoucancreateacompanycodeinSAPbyperformingthefollowingsteps:

o OpentheSAPCustomizingImplementationguide.
o SelectEnterpriseStructure>Definition>FinancialAccounting>Edit,Copy,Delete,CheckCompanyCode.TheChoose
Activitydialogboxappears.

o DoubleclickEditCompanyCodeData.ThechangeviewCompanyCode:Overviewscreenappearswhereyoucancreatea
companycode.
7.HowcanyouassignacompanycodetoacompanyinSAP?
InSAP,acompanycodeiscreatedusingthetransactionOX02.Thecompanycodefieldisrepresentedbyafourcharacter
alphanumericstring.YoucancreateacompanycodeinSAPbyperformingthefollowingsteps:

o OpentheSAPCustomizingImplementationguide.

o SelectEnterpriseStructure>Definition>FinancialAccounting>Edit,Copy,Delete,CheckCompanyCode.TheChoose
Activitydialogboxappears.

o DoubleclickEditCompanyCodeData.ThechangeviewCompanyCode:Overviewscreenappears,whereyoucancreatea
companycode.
8.Howmanychartsofaccountscanbeassignedinacompany?
Yes.OnechartofaccountscanbeassignedtoseveralCompanyCodes.However,thereverseisnotpossible;i.e.,youwillnotbe
ableassignmorethanonechartofaccountstoasingleCompanyCode.
9.Howmanycompanycodescanbeassignedinonechartofaccounts?

Youcanassignmanycompanycodestoachartofaccounts.
10Howmanycompanycodescanbeassignedtoacompany?

Youcanassignonlyonecompanycodetoaplant.
11.WhatisaplantinMM?

Aplantisanorganizationalunitwherematerialsareproducedorgoodsandservicesareprovided.InSAP,aplantis
representedbyauniquefourdigitalphanumericnumber.Aplantisallocatedtoonecompanycode,andacompanycanhave
manyplants.Intheorganizationalunit,aplantcanbeatoneofthefollowinglocations:

Corporateheadquarters
Centraldeliverywarehouse
Manufacturingfacility
Regionalsalesoffice
12.HowisaplantdefinedinMM?
YoucandefineaplantintheMMbyperformingthefollowingsteps:

SelectIMG>EnterpriseStructure>Definition>LogisticGeneral>define,Copy,Delete,CheckPlant.

ClickExecute.TheChooseActivitydialogboxappears.
SelectDefinePlanttocreateaplant.ThechangeviewPlants:Overviewscreenappears.
 ClickNewEntries.TheNewEntries:DetailsofAddedEntriesscreenappears.
Specifytheplantcodeintheplantfield.
ClicktheaddressicontodisplaytheEditAddressfield.
Specifytherequiredvaluesinthefields,suchasTitle,Name,andSearchTerm1/2.
ClickOK.TheNewEntries:DetailsofAddedEntriesscreenappearsagain.
ClicktheSaveicontosavethenewlydefinedplant.
13.Whataretheprerequisitesforcreatingaplant?

Therearethreeprerequisitesthatarerequiredinordertocreateaplant.Theyareasfollows:
CompanycalendarComprisedofworkdays,publicholidays,andcompanyholidays.EverySAPsystemisprovidedwitha
companycalendarthatcanbemodifiedperthescheduleofthecompany.
CountrykeyHelpsindefiningaplant.
RegionkeyReferstoastateorprovincethatisassociatedwiththecountry.Itisrequiredalongwiththecountrykey.

14.Howmanycompanycodescanbeassignedtoaplant?

Youcanassignonlyonecompanycodetoaplant.
15.Canacompanycodebeassignedtomanyplants?

Youcanassignmanyplantstoonecompanycode.

16.Whatisthemenupathtoassignaplanttoacompanycode?

Youcanassignacompanycodetoaplantbynavigatingthefollowingmenupath:SAPMenu>Tools>Customizing>IMG>
ExecuteProject>DisplayIMG(SAPreferenceIMG)>EnterpriseStructure>Assignment>LogisticsGeneral>Assign
CompanyCodetoPlant.

17.DefineStoragelocationinSAP.

Astoragelocationisdefinedbyperformingthefollowingsteps:

o SelectTools>Customizing>SAPReferenceIMG>EditProject.
o SelectEnterpriseStructure>Definition>MaterialsManagement>MaintainStorage.
o Clicktheclockicon.TheDetermineWorkArea:Entrydialogboxappears.
o Specifythevalue(P001)fortheplantinthedialogbox.
o Clickthecheckmarkicon.ThechangeviewStorageLocations:Overviewscreenappears.
o ClickNewEntries.TheNewEntries:DetailsofAddedEntriesscreenappears.
o Specifythevalueofthestoragelocationanddescriptionfields.
o ClicktheSaveicontosavethestoragelocation.
o ClicktheExiticontocreatethestoragelocation.
18.Howwillyoudefineastoragelocation?
Astoragelocationisdefinedbyperformingthefollowingsteps:

SelectTools>Customizing>SAPReferenceIMG>EditProject.

SelectEnterpriseStructure>Definition>MaterialsManagement>MaintainStorage.

Clicktheclockicon.TheDetermineWorkArea:Entrydialogboxappears.

Specifythevalue(P001)fortheplantinthedialogbox.

Clickthecheckmarkicon.ThechangeviewStorageLocations:Overviewscreenappears.

ClickNewEntries.TheNewEntries:DetailsofAddedEntriesscreenappears.

Specifythevalueofthestoragelocationanddescriptionfields.

ClicktheSaveicontosavethestoragelocation.

ClicktheExiticontocreatethestoragelocation.
19.Howisastoragelocationassignedtoaplant?

YoucanassignastoragelocationtoaplanteitherbyusingthetransactioncodeOX09orbyperformingthefollowing
steps:

o OpentheSAPCustomizingImplementationguide.
o SelectEnterpriseStructure>Definition>MaterialsManagement>MaintainStorageLocation.Theview
clusterMaintenance:InitialScreenwindowappearswiththeDetermineWorkArea:Entrydialogboxopened.
IntheDetermineWorkArea:Entrydialogbox,enteraplantnumberandclickContinue.ThechangeviewStorage
Locations:Overviewscreenappearswhereyoucanassignastoragelocationtotheplant.
20.Canstoragelocationsbecreatedautomatically?Howcantheybecreatedautomatically?

Storagelocationscanbecreatedautomaticallywhenaninwardgoodsmovementforamaterialisperformed.Inordertocreate
storagelocationautomatically,opentheSAPImplementationguideandclickMaterialsManagement>Inventory
ManagementandPhysicalInventory>GoodsReceipt>CreateStorageLocationAutomatically.

3.MasterDatainSAPMM

1.WhatisMasterdatainMMmodule?
ThemasterdataintheMMmoduleactsasreferencedata,definingvariousbusinessentitiesandplayingakeyroleinthecore
operationofthebusiness.
2.HowismasterdataimportantinMMmodule?

ThemasterdataintheMMmodulecontainsallofthebasicinformationneededtomanagematerial.Thedataisstoredand
sortedonthebasisofdifferentcriteria,suchasthedescriptivenatureofthematerial(size,dimension,andweight)andthe
controlfunctionsofthematerial(materialtypeandindustrysector).Apartfromdatamaintainedbytheuser,themasterdata
alsostoresdatathatisautomaticallyupdatedbythesystem(suchasstocklevels).
3.WhatarethevarioustypesofmasterdatainMMmodule?

ThedifferenttypesofmasterdataintheMMmoduleareasfollows:

Materialmaster
Vendormaster
Purchasinginformationrecord
Sourcelist
Quotaarrangement
4.WhatisaMaterialMasterfile?

Amaterialmasterfilestoresandmaintainsalloftheinformationrelatedtomanagingamaterial.Thematerialmasterissorted
onthebasisofdifferentcriteria.
5.WhyarematerialmasterrecordsusedinSAP?

MaterialmasterrecordsareusedintheSAPR/3systemtomanagematerialspecificdata.Thematerialinformationstoredin
materialmasterrecordsisusedbyalllogisticsareasintheSAPR/3system.Thematerialmasterrecordsintegrateallmaterial
specificdataintoasingledatabaseobjectthateliminatestheproblemofdataredundancy.Becausematerialmasterrecords
storedatainasingledatabaseobject,thesamedatacanbesharedbyalldepartments,suchaspurchasing,inventory
management,materialsplanning,andinvoiceverification.
6.Howistheinformationofmaterialmasterrecordsupdated?

Youcanmanuallyupdatetheinformationinthematerialmasterrecords,however,therearesomeexceptionsforwhichthe
informationcanbeupdatedbytheSAPR/3systemonly,forexample,administrativedata.
7.WhatarethetypesofindustrysectorsdefinedinMaterialMasterdata?

Thedifferenttypesofindustrysectorsdefinedinthematerialmasterdataareasfollows:

o Aerospaceanddefense
o Beverage
o Chemicalindustry
o Foodandrelatedproducts
o Mechanicalengineering
o Pharmaceuticals
o Plantengineering/construction
o Retail
o Retailing
o Serviceproviders
8.Whatdatainmaterialmasterismaintainedattheclientlevel?

Thegeneraldata,i.e.,thedataapplicabletothecompanyasawhole,isstoredattheclientlevel.
9.Whatarethedatainmaterialmasterthataremaintainedatthecompanycodelevel?

Thedatathatisspecifictoaparticularcompanyandtheplantandstorageareasassignedtothatcompanyismaintainedatthe
companycodelevel.
10.Whataretheplantspecificdatainmaterial?

TheMRPdataandforecastdataaretheplantspecificdatainthematerialmaster.
11.Whatisthelotsizeattributeofamaterial?

Thelotsizeattributerepresentsthereorderquantityforamaterial.Amaterialcanhaveaperiodic,optimum,orstatic
(fixed)lotsize.
12.Howismaterialinformationstructuredinmaterialmasterrecords?

Materialinformationisstructuredinmaterialmasterrecordsonthebasisofdifferentcriteria,suchasthematerial'smaster
detail(includingitsname,size,dimension,andweight),whichshowsitsdescriptivenature,andthematerial'sdetailrelatedto
controlfunctions(suchasmaterialtype,pricecontrol,andindustrysector).Materialmasterrecordsalsostoreinformation
aboutthedatathatcanbeautomaticallyupdatedbythesystem.Forexample,thestocklevelcanbeautomaticallyupdatedby
thesystemonthebasisofthematerialdataupdate.
13.Whatisabatch?

Abatchisagroupofmaterialscombinedintoonequantityforvariousreasons.Veryoften,materialswiththesame
characteristicsandvaluesaregroupedintoabatch.Forexample,inthechemicalindustry,aspecifiednumberofcontainersofa
specificproductmaybeconsideredabatchiftheywereproducedatthesametimeandhavethesamephysicalandchemical
characteristics.
14.Whyisbatchrecordimportant?

Abatchrepresentsaquantityofaparticularmaterialprocessedatthesametimewiththesameparameters.These
materials,producedasonebatch,havethesamecharacteristicsandvalues,whichmayvaryfromthematerialsofanotherbatch
producedonthesameday.

AbatchrecordisimportantbecausebatchrecordsindicatethatthebatchconformstothecurrentGoodManufacturing
Procedures(GMP).Thebatchrecordalsocontainsspecificinformationabouttheproducttested,analyticalmethods,andtest
results.
15.Howtocreateabatch?

YoucancreateabatchrecordmanuallybyusingthetransactioncodeMSC1N.Thenavigationpathforcreatingabatch
is:SAPMenu>Logistics>MaterialsManagement>MaterialMaster>Batch>Create.
16.Whataretheimportantfieldsinabatchmasterrecord?

Theimportantfieldsinabatchmasterrecordareasfollows:
o ProductiondateReferstothedatewhenthebatchwasproduced.
o SelflifeexpirationdateReferstothedatewhenthelifeofthebatchwillexpire.
o AvailablefromReferstothedatefromwhichthebatchwillbeavailabletootherdepartments.
o BatchstatusAllowsthebatchtobeclassifiedashavingrestrictedorunrestricteduse.
o NextinspectionReferstothenextqualityinspectiondateofthebatch.
o VendorbatchReferstothebatchnumberassignedbythevendor.
o ClassAllowstheusertosortthebatchforuseinspecificclasses.
o CharacteristicsHelpsinassigningaclasstothebatch.
o ReleasestatusSpecifiesthestatusofthebatch.
o LinkeddocumentHelpstheusertolinkthedocumentsrelatedtothebatch.
o DocumenttypeAllowstheuserwhoispurchasingthebatchtospecifyadocument.
o DocumentHelpstheusertoselecttherelevantdocument.
o DocumentpartAllowstheusertoenterthepartofthedocumentthatisrelatedtothebatch.
o VersionSpecifiesthedocumentversionofthebatch.
17.Howcanbatchrecordsbechanged?

YoucanchangeabatchrecordbyusingthetransactioncodeMSC2N.Thenavigationpathofchangingthebatchrecord
is:SAPMenu>Logistics>MaterialsManagement>MaterialMaster>Batch>Change.
Itisimportanttonotethatthesechangestothebatchrecordwillalsobeavailableforreview.
18.Howtodeleteabatch?

YoucandeleteabatchbyusingtheMSC2Ntransactioncode.Youcanalternatelydeleteabatchrecordbyflaggingthebatch
masterrecord.Forthis,youneedtofirstselectthebatchintheChangemode.
19.WhatisBatchInformationCockpit?

TheBatchInformationCockpit(BIC)isthemainswitchingpoint,havingawiderangeofoptionsforscrutinyandcontrolof
batches.Itstoresatasinglelocationalltheinformationrelatedtotheanalysisofaparticularbatch.
20.Whatarethelevelsatwhichabatchnumbercanbeconfigured?

Abatchnumbercanbeconfiguredatseveraldifferentlevels:clientlevel,plantlevel,andmateriallevel.Youcanselectabatch
numberatanyofthefollowinglevels:
ClientlevelWhenyouconfigureabatchattheclientlevel,youneedtoassignthebatchnumberonlyoncethroughout
thewholeclient.Onlyonebatchnumberexistsforeachmaterialassignedatthislevel.
 PlantlevelInSAP,theplantlevelisthedefaultlevelforthebatchnumber.Atplantlevel,abatchnumberisuniquefor
aplantandmaterial.Thismeansthatyoucanhaveabatchofthesamenumberatadifferentplantwithinthesamecompany.
MateriallevelAtthislevel,materialnumbersareassignedtotheproducts.Thematerialnumberhelpstodifferentiate
betweentwoproductsincasetheirbatchnumbersarethesame.Thematerialsareidentifiedbythecombinationofthematerial
numberandbatchnumber.
21.Howarebatchnumbersassigned?

ThebatchnumberispredefinedinSAP.YoucanchangethebatchnumberseitherbyusingtheOMADtransactioncodeorby
usingthenavigationpathIMG>LogisticsGeneral>BatchManagement>BatchNumberAssignment>MaintainInternal
BatchNumberAssignmentRange.
Followeitherofthetwoconfigurationstepstochangethebatchnumber:
Youcanassignabatchnumberinternallyusingtheinternalnumberrange,eitherbyusingtheOMCZtransactioncodeor
byfollowingthenavigationpathDisplayIMG>LogisticsGeneral>BatchManagement>BatchNumberAssignment>
ActivateInternalBatchNumberAssignment>ActivateBatchNumberAssignment.
YoucanalsoconfigurethesystemtoallowautomaticnumberingofabatchbyfollowingthenavigationpathDisplay
IMG>LogisticsGeneral>BatchManagement>BatchNumberAssignment>ActivateInternalBatchNumberAssignment
>InternalBatchNumberAssignmentforAssignedGoodsReceipt.
22.Whatisaserialnumber?

Aserialnumberisassignedtoanitemtoidentifyitandtostoreinformationaboutit.Aserialnumberismostlyusedtoreferto
equipmentsuchasmotors,drills,orvacuums.InMM,anitemofmaterialcontainsaserialnumberaswellasamaterial
number.Thiscombinationhelpstouniquelyidentifyanitemofmaterial.
23.Whatisaclasstype?Howwillyouconfigureaclasstype?

AclasstypeistheSAPsystem'stoplevelunit,whichisusedtocontroltheSAPsystem'sclasses.Itperformsthefollowing
tasks:
o Definestheclassobjects
o Checksifclassobjectscanbeusedinotherclassesornot
o Definestheclassmaintenancescreen

Youcanconfigureaclasstypebyusingthefollowingmenupath:SAPCustomizingImplementationGuide>Cross
ApplicationComponent>ClassificationSystem>Classes>MaintainObjectTypesandMaterialTypes.
24.Amaterialdoesnothaveamasterrecord.Howcanweprocurethat?

Theremaybeinstanceswhenamaterialdoesnothaveamasterrecord.Youcanperformdifferentfunctionsindifferent
situationstoprocurethemasterrecord.Forexample:
Youcancreateamaterialmasterrecordifthereisnomaterialmasterrecordforaparticularmaterial.
Youcanextendthematerialmasterrecordifthematerialmasterrecordexistsforaparticularmaterialbuttheuser
departmentdoesnothavethemasterdata.
Youcanalsoextendthematerialmasterrecordifthematerialmasterrecordexistsforaparticularmaterialandtheuser
departmenthasthemasterdatabutithasbeenenteredinadifferentorganizationallevel.
25.Statetheimportanceofclassificationdata.

Classificationdataallowsyoutosearchformaterialsonthebasisofthecharacteristicvaluesenteredintotheclasses.This
featureisveryusefulwhenthecustomerwantstosearchforaparticularvendorandparticularbatches.
26.WhatisanABCindicator?

AnABCindicatorisanindicatorassignedbytheABCanalysisprocedure.AnABCindicatorprovidesdetailsofthe
consumptionvalueofthematerialinvolvedintheABCanalysis.TheABCanalysisisperformedbymultiplyingthecurrent
priceofthematerialsbytheirquantity.Thedifferentconsumptionvaluesaregivenasfollows:
AmaterialsImportantparts,highusage/consumptionvalue
BmaterialsLessimportantparts,mediumusage/consumptionvalue
CmaterialsRelativelyunimportantparts,lowusage/consumptionvalue

27.WhatarethemainmasterfilesusedinMM?

ThefollowingarethemainmasterfilesusedinMM:

Materialmasterfile
Inventorymasterfile
Vendormasterfile
28.Givesomeexampleofmasterdatainmaterialmanagement(MM).

Materialmaster,materialmastergeneraldata(MARA),taxClassificationmaterial(MLAN),inforecords,sourcelist,and
vendormasterareexamplesofmasterdatainMM.
29.Howisthevendorcreated?

YoucancreateavendorbyusingthetransactioncodeXK01andperformingthefollowingsteps:

Addthevendorname,companycode,purchasingorganization,accountgroup,andvendoraddress.
Addthecountry,bankkey,bankaccount,andthenameoftheaccountholder.
Savethedata.
Thiscreatesavendorrecordinthesystem.
30.Whatisvendormasterdata?

Vendormasterdatacontainsdetailsofeachvendorthatsuppliesmaterialsorservicestoanenterprise.Thevendormasterdata
isstoredinindividualvendormasterrecordsconsistingofdata,suchasthevendor'sname,thevendor'saddress,thecurrency
usedforthetransaction,paymentterms,andthecontactperson'sname(onthesalesstaff).
31.Whatarethedifferentsectionsinvendormasterdata?
Followingarethethreesectionsinvendormasterdata:
GeneraldataProvidesgeneralinformationaboutthevendorthatcanbeenteredintothesystemforcreatingvendorrecords.
Generaldatacanprovidethename,address,telephone,andfaxofthevendorthroughspecifiedsearchterms.Additional
informationcanalsobeaddedtothevendormasterrecordbytheaccountingandpurchasingdepartmentsusingthetransaction
codeXK01.
AccountingdataReferstofinancialinformationenteredatthecompanycodelevel.Thefinancialinformationincludestax
information,bankdetails,reconciliationaccount,paymentterms,paymentmethods,anddunninginformation.Youcanenter
thisfinancialdatausingthetransactioncodeFK01.
PurchasingdataReferstodataenteredwhilecreatingavendoratthepurchasingorganizationlevel.Differentpurchasing
organizationshavedifferentpurchasingdata.Thepurchasingdataincludespartnerfunctions,purchasingdefaultfields,and
invoiceverificationindicators.YoucanenterthisdatausingthetransactioncodeMK01.
32.Whatarethedifferentfieldsinvendormasterdata?
Thedifferentfieldsinvendormasterdataareasfollows:
Thenameandaddressofthevendor
Thecurrencyinwhichthetransactionwillbedone
Thetermsandconditionsofpayment
Thenamesofimportantcontactpersons
Theaccountinginformation,suchasthereconciliationaccountinthegeneralledger
33.Howdowecreateavendornumberrange?
Whenyoucreateanumberrange,itisimportanttorememberthatvendornumbers,suchasmaterialnumbers,canbeassigned
externallyorinternally.Youcancreatevendornumberrangesbyselectingthefollowingnavigationpath:IMG>Financial
Accounting>VendorAccounts>MasterData>PreparationsforCreatingVendorMasterData>CreateNumberRangesfor
VendorAccounts.
Forconfiguringthevendornumberrange,youshouldenterauniquenumberfortherange,whichisatwocharacterfield,and
thenspecifythelimitforthenumberrange.Thecurrentnumberfieldisusedtodefinethecurrentnumber.TheExt.field
Specifieswhetherthenumberrangeisdefinedexternallybytheuser.
34.Whatisdunningprocedure?Howcanitbeconfigured?
Sometimes,youmayneedtosendapaymentreminderoradunningnoticetoapersonoranorganizationtoremindthemof
theiroutstandingdebts.Theprocessbywhichthesystemcontrolsdunningiscalleddunningprocedure.Dunningprocedurecan
beconfiguredbyusingtheFBMPtransactioncodeorthefollowingnavigationpath:IMG>FinancialAccounting>
AccountsReceivableandAccountsPayable>BusinessTransactions>Dunning>DunningProcedure>DefiningDunning
Procedures.
35.Howdoweassignmaterialtovendors?
Selectthefollowingnavigationpathtolinkvendorstomaterials:SAPMenu>Logistics>MaterialManagement>
Purchasing>MasterData>InfoRecord>Create.Alternatively,theME11transactioncodeisusedforthispurpose.
36.WhatisthetransactioncodetoaccesstheMaterialsManagementConfigurationmenu?
TheOLMStransactioncodeisusedtoaccesstheMaterialsManagementconfigurationmenu.
37.WhatarethevarioustransactioncodestoaccesstheMMconfiguration?
ThefollowingarethevarioustransactioncodestoaccesstheMMconfiguration:
TransactionCode Description
OLMD AccessesMaterialManagementConsumptionBasedPlanning(MMCBP)
OLMB AccessesMaterialManagementInventoryManagement(MMIM)
OLME AccessesMaterialManagementPurchase(MMPUR)
TransactionCode Description
OLML AccessesMaterialManagementWarehouseManagement
OLMS Accessesthematerialmasterdata
OLMW Enablesvaluationandaccountassignment

38.WritethenamesofsomeimportantMMtables
ThefollowingtableliststheimportantMMtablenames:
TableName Purpose
EINA Usedforgeneraldataofthe(purchasing)informationrecord
MARC Usedinplantdataformaterials
EINE Usedforpurchasingorganization
MAST Usedforbillsofmaterial(BOM)link
MKPF Usedforheadermaterialdocument
MAKT Usedformaterialdescription
MARD Usedinstoragelocationdataformaterial
MARA Usedforgeneralmaterialsdata
MBEW Usedformaterialvaluation

39.Whatarepurchasinginformationrecords?
Purchasinginformationrecords,alsoknownasinforecords,containinformationrelatedtothematerialandthevendorwhois
supplyingthematerial.Theyalsocontaindetailsaboutthematerial,suchasthecurrentprice.
40.Whatarethecategoriesofpurchasinginformationrecords?
Thecategoriesofpurchasinginformationrecordsareasfollows:
StandardContainsinformationforthestandardpurchaseorder.Inthistypeofpurchasinginforecord,youcancreateinfo
recordsformaterialsandservicesthatdonothavemasterrecords.
SubcontractingContainsorderinginformationforsubcontractorders.
PipelineContainsinformationoncommoditiesthataresentthroughapipeline,suchasoilorwater.
ConsignmentContainsinformationonmaterialsthatareinthevendor'spossessionandarekeptbythevendoratsomeother
premisesathisowncost.
41.Whataretheprerequisitesforcreatingapurchasinginforecord?
Theprerequisitesforcreatingapurchasinginforecordareasfollows:
MaterialnumberBeforecreatingapurchasinginforecord,thematerialnumberofthematerialmasterrecordshouldbe
known.
Manufacturerpartnumber(MPN)materialnumberBeforeorderingamaterialthathasanMPN ,youmustknowitsMPN
materialnumber.
VendornumberYoushouldalsoknowthenumberonthevendormasterrecord.
OrganizationallevelIfthepurchasinginforecordisforaparticularpurchasingorganizationorplant,thenthecodespecific
tothatpurchasingorganizationorplantisrequired.
42.Howcanwecreateapurchasinginformationrecord?
YoucancreateapurchasinginformationrecordeithermanuallyorautomaticallybysettingtheInfoUpdateindicatorwhen
maintainingaquotation,apurchaseorder,oranagreement.
43.Canapurchasinginforecordbecreatedwithoutamaterialnumber?
Yes,youcancreateapurchasinginforecordwithoutamaterialnumber.Ifthematerialdoesnothaveamaterialnumber,you
willneedthefollowinginformationtocreatethepurchasinginforecord:
Materialshorttext
Orderunit
Materialgroup
Shorttermkey
44.Howcanwecreateaninformationrecordbasedonthematerialmaster?
First,youneedtocreatetheinforecordbyselectingSAPMenu>MasterData>InfoRecord>Create.Enterdetailssuchas
vendornumber,materialnumber,purchaseorganization,orplantnumber.Thenenterthenumberoftheinformationrecord(in
caseofexternalassignments).Next,enterthegeneraldataforvendors,orderedquantity,originofdata,supplyinginformation,
andcustomstariffnumber.Thenentertheplanneddeliverytime,purchasinggroups,andstandardpurchasingquantity.Check
thecontroldataandtakethedefaultvalueoftolerancedataandthepurchasinggroupfromthematerialmasterrecord.Finally,
enterthenetpriceandthenselectGoTo>Textstodisplaythetextoverview.IfthePOtextisalreadydefined,itappearsin
thematerialmasterrecord;otherwise,itneedstobeentered.Afteralltheseentrieshavebeenmade,therecordissaved.
45.Whatisthedocumentmanagementsystem(DMS)inSAP?
TheDMSinSAPhelpsyoustoreexternaldocuments,suchaspicturesofthegoodsormaterial.ByusingtheDMS,youcanset
themaximumsizeofthepicturethatcanbeuploadedinadocument.TheDMShelpstolinktheseexternaldocumentswiththe
appropriateSAPobjects.

4.ProcurementandPurchasinginsapmm

1. WhatarethespecialstocksusedinMM?

Specialstocksarestocksthataremanagedseparatelyregardlessofwhethertheybelongtoyourcompany.Thecompanymanages
amaterialbyusingadatarecord,whichcontainsalltherequiredinformation.Thedifferenttypesofspecialstocksareas
follows:
Salesorderstock
Returnablepackagingwithcustomer
Consignmentstockatcustomer
Vendorconsignmentstock
Returnabletransportpackaging
Subcontracting
Pipeline
2.Whatarethedifferencesbetweencompanyownedspecialstocksandexternallyownedspecialstocks?

Thedifferencesbetweencompanyownedspecialstocksandexternallyownedspecialstocksarelistedinthe
followingtable:
 CompanyOwnedSpecialStocks ExternallyOwnedSpecialStocks
StocksthatbelongtothecompanybutarestoredwiththeStocksthatbelongtothewholesalerorthecustomerbut
wholesalerorthecustomerarecalledcompanyowned arestoredatthecompanyarecalledexternallyowned
specialstocks. specialstocks.
Companyownedspecialstocksaremanagedatthe Externallyownedspecialstocksaremanagedattheplace
productionlevel. wheretheyarestored.

3.Whyisnegativestockneededinanorganization?

Organizationsneednegativestockwhenamaterialisshippedtoacustomerandproductionisnotconfirmedorthereisnot
enoughstocktosatisfytherequirement.Thesystemstillallowstheissuingofthematerial,andinventoryshowsanegative
quantityofstockuntiltheproductionofthematerialisconfirmed.
4.Whatarespecialprocurementtypes?

Inanormalpurchasingsystem,thecustomerpurchasesthegoodsfromthewholesaler/retailerandthepossessionofthegoods
transfersfromthewholesaler/retailertothecustomer.Thismightnotbethecasewithspecialprocurementtypes,wherethe
transferofgoodsmaynotnecessarilybefromthewholesaler/retailertothecustomerdirectly.Forexample,youmightordera
goodforafriendofyours,who,inturn,purchasesthegoodfromthewholesaler/retailerandthentransfersthegoodtoyou.The
friendisthethirdpartyinvolvedinthisprocess.Therefore,thepossessionofthegoodindirectlytransferstothecustomer.This
typeofprocurementiscalledthespecialprocurementtype.Thespecialprocurementtypedefinestheexternalprocurementorin
houseproductionofthematerial.ThefollowinglistshowsthespecialprocurementtypesavailableintheSAPsystem:
Consignment
Subcontracting
Stocktransferusingthestocktransportorder(STO)
Productioninanotherplant
Thirdpartyprocessing
Returnabletransportpackaging
Pipelinehandling
5.Defineconsignmentstock.Whatarethemainfeaturesofconsignmentstock?

Consignment,inageneralsense,istheactofholdingtheownershipofmaterialsbutstoringthematerialsatsomeother
premisesuntilthematerialsaresoldorshiftedsomewhereelse.ThestoredmaterialsareknownasconsignmentstockintheSAP
system.Therefore,stockthatisstoredatthecustomer'spremisesbutisthesupplier'spropertyuntilthestockistransferredto
thecustomer'sstocklistiscalledtheconsignmentstock.Themainfeaturesoftheconsignmentstockareasfollows:

Youcancombinetheconsignmentstockwithyouravailablestockatanypointintime.
Youcanevaluatetheconsignmentstockinanycurrency.
Thepriceoftheconsignmentstockfluctuates.Thismeansthatyoucandeterminethepriceoftheconsignmentaccording
tothemarketconditions.
 Youcanpricetheconsignmentstockinanyunit.
Youcanusedifferentfeaturesofpurchasing,suchasdiscounts,intheconsignmentstock.
Theconsignmentstockisevaluatedatapricequotedbydifferentvendors.
6.Howisthepricingofconsignmentstocksdone?Whatinformationdoesconsignmentinfo
recordcontain?

Priortoorderingamaterialfromavendororpostingagoodsreceipttotheconsignmentstock ,youneedtoobtainthe
consignmentprice.Iftheconsignmentmaterialisorderedfromseveralvendors,thesystemmaintainstheconsignmentstockof
eachvendorseparately.Thereasonthesystemmaintainstheconsignmentstockseparatelyisthatthepriceoftheconsignment
stockmayvaryfromonevendortoanother.
Theconsignmentinformation(info)recordcontainstheconsignmentpricerequiredforthepurposeofmaterialvaluation
andaccounting.
7.Howaretheconsignmentstockscreated?

Consignmentstocksarecreatedinthenormalpurchaseorder(PO)orrequisition,butthemainthingtoconsideristhatyoumust
entertheKcategoryfortheconsignmentitem.Asaresult,thegoodsissuedarepostedtoconsignmentstoresandtheinvoice
receiptisnotgenerated.
8.Definetheconsignmentcycle?

Consignmentcycleissimilartothepurchasecycle,exceptthatwhenyoucreategoodsreceiptsoftheconsignmentstocks,
onlyquantity(QTY)isupdatedandnoaccountingdocumentsarecreated.Oncethegoodsareutilized,consignmentissettled.
Thevalueoftheconsumedorissuedconsignmentstocksistakenfromtheactivepurchaseinforecord.
9.Howisconsignmentmaterialprocured?

Consignmentmaterialisprocuredthroughpurchaserequisitions,POs,andoutlineagreements.
10.HowcanweseetheconsignmentstocksinSAP?

YoucanseetheconsignmentstocksinSAPbyusingthefollowingfunctions:
Displayconsignmentinforecord
Displaythestockoverview
Displayconsignmentstocks
11.Howcanwetakeconsignmentstocksintoourownstock?

Youcantakeconsignmentstocksfromthevendorintoyourownstockbyperformingthefollowingsteps:

SelectGoodsMovement>TransferPostingtodisplaytheinitialscreen.
Entertheplantnameandthelocationwhereyouwanttostorethematerials.
SelectMovementType>TransferPosting>Consignment>ConsignmenttoOwn.
SelectContinuetodisplaythecollectiveentryscreen.
Enterthenameofthevendor,thematerials,andthequantityofmaterials.
Enterthereceivingstoragelocationifyouwanttostorethematerialsinanotherstoragelocation.
Postthedocument.Thismakesthevendorliabletochangethestoragelocationofthematerials.
12.Canwedothephysicalinventorycheckofconsignmentstocks?

Yes,youcandothephysicalinventorycheckofconsignmentstocks.Todothephysicalinventorycheck ,performthefollowing
operations:
Createaphysicalinventorydocument
Enterthephysicalinventorycount
Posttheinventorydifferences
13.Howcanyoudoinvoicingincaseofconsignmentstocks?

Youcaninvoiceinthecaseofconsignmentstocksbyperformingeitherofthefollowing:

InvoicewithPO
InvoicewithoutPO
14.Whatdoyoumeanbysubcontracting?

Subcontractingcanbedefinedastheprocessingofmaterialsbyanexternalsupplier.
15.HowissubcontractingusedincaseofMM?

Subcontractingistheprocessbywhichthevendorreceivesthematerialstoproducetheendproduct.Subcontractinginvolves
thefollowingprocedures:

Youordertheendproductbyusingthesubcontractorder.Thecomponentsthatthevendorneedstomanufacturetheend
productarementionedinthePO.
Duringtheinventorymanagementprocess,thecomponentsarepostedtothestockofmaterialprovidedtothevendor.
Later,thecomponentsaresuppliedtothevendor.
Thevendorthenprocessestheserviceanddeliversthematerialsordered.Theconsumptionofthecomponentsisposted.
If,afterpostingthegoodsreceipt,thevendornotifiesyouthatthequantityofthecomponentsactuallyconsumedis
differentthanplannedinthePO,youmustmakeanadjustment.
Thevendorthenchargesfortheservice,forwhichtheinvoiceispostedinInvoiceverification.
16.Whatinformationdoesthesubcontractinginforecordscontain?

Asubcontractinginforecordconsistsoforderinginformationrelatedtosubcontractorders.Forexample,ifyouenteredintoa
contractwithanoutsidesourcefortheassemblyofacomponent,thesubcontractinginforecordwouldcontaintheprice
specifiedbythevendorfortheassemblywork.
17.HowdowecreatesubcontractingPO?

PerformthefollowingstepstocreateasubcontractingPO:
o Enterthematerialtoorderandthecategoryoftheitemforsubcontracting(L)intheorderitem.
o PresstheEnterkeytodisplaythescreenforcomponentprocessing.
o Inthecomponentprocessingscreen,enterthecomponentsrequiredbythevendortomanufacturetheorderedmaterial(end
product).Whenenteringthecomponents,youneedtotakecareofthefollowingpoints:
o Youdonotneedtoenterthedaterequiredforthecomponents.ThesystemproposesthisdatewhenyoupresstheEnterkey.
Itiscalculatedasfollows:
Deliverydateoftheitem(planneddeliverytime)
o Ifyoudonotwishthequantityofthecomponentstobealtered,eveniftheorderquantityoftheendproductischanged,
thensettheindicatedfieldtofixedquantity.
o Ifyouwanttoallocateaparticularbatchofthecomponenttothevendorforthemanufactureoftheorderedmaterial,enter
thedesiredbatch.
o Todeterminewhetherornotthecomponentsareavailableonthedaterequired,selectComponentList>Component
Availability.
o Whenyouenterabillofmaterialasthematerialinthesubcontractorder,thecomponentsareautomaticallycreated.
o Youcanalsodeterminethecomponentsinthebillofmaterialatalaterdate(forexample,ifthebillofmaterialis
subsequentlychanged)byselectingItem>Goto>Components>NewBOMExplosion.Theexistingentryofthecomponents
isremovedandagaindeterminedinthebillofmaterial.
o SavethePO.
WhenyouprintthePO,thecomponentsareprintedperorderitem.

18.Howcanweviewthestocksprovidedtovendor?

ThestocksofmaterialprovidedtoavendorcanbeviewedbyusingtheSCStockMonitoringforVendorreport.Thereportcan
beaccessedbyselectingPurchase Order > Reporting > SC Stocks per Vendor from the menu. With this
report, the current status of the stocks, planned issues, and planned receipts can be viewed.
19.Howarecomponents(materials)providedtovendor?

Thecomponents,orratherthequantitiesofthecomponentsrequiredtomanufacturetheendproduct,areprovidedinthestock
ofmaterialtobeprovidedtothevendor.Thestockofmaterialprovidedtothevendoristhetotalvaluatedstockthatis
availableforMRP.Thetotalvaluatedstockismanagedattheplantlevel,atthesiteofthevendor.Thisstockcanbeeitheran
unrestricteduseorqualityinspectionstock.Theunrestrictedusestockreferstothevaluatedstockofamaterialthatisowned
bythecompanyanddoesnothaveanyrestrictionsonitsusage.Thequalityinspectionstockisintendedtobeusedonlyfor
qualityinspection.Thecomponentscanbeprovidedtoavendorinthefollowingways:
Postingthecomponentsfromtheunrestrictedusestock
Receivingthecomponentsfromanothervendor

20.Howarecomponentsconsumedincaseofsubcontracting?

Insubcontracting,theendproductisorderedbyusingasubcontractorder.Thematerialsorcomponentsrequiredbythevendor
tomanufacturetheendproductarementionedinthePO.Thecomponentsarepostedtothestockofthematerialprovidedto
thevendorduringinventorymanagement.Whenthecomponentsaresuppliedtothevendor,thevendormanufacturestheend
productanddeliversit.Atthispoint,thegoodsreceiptispostedwithareferencetothesubcontractorder.Thegoodsreceiptalso
containsthepostingoftheconsumptionofthecomponentsfromthestockofmaterialprovidedtothevendor.Ifthecomponents
consumedbythevendoraremoreorlessthanthatspecifiedinthePO,anadjustmentneedstobepostedtocorrectthe
consumptionofcomponents.

5.InventoryManagementinSAPMM

1. GiveanoverviewofInventorymanagementinSAPsystem?

InventorymanagementintheSAPsystemhelpsrecordandtrackstocksofmaterials.Italsoinvolvestheplanningand
documentationofallgoodsmovements..
2.WhattasksarecoveredunderInventoryManagement?

Inventorymanagementisanimportantpartofmaterialsmanagement(MM).Optimalinventorymanagementnotonlyensures
anuninterruptedsupplyofthematerialattherequiredtime,butalsopreventswastingitems.MMcoversthefollowingtasks:
Materialstockmanagement
Planning,entry,anddocumentationofgoodstransfersfromandtotheinventory
Physicalstockingofitems
3.WhatisPhysicalInventory?
Physicalinventoryisaprocessinwhichallthetransactionsrelatedtothemovementofgoodsarestoppedandthe
companyphysicallycountsinventory.Itisrequiredinfinancialaccountingrulesorforplacinganaccuratevalueonthe
inventoryfortaxpurposes.
4.Whataretheinitialconfigurationstepsforphysicalinventory?
Thestepsforpurchaseacquisitionareasfollows:
Definingthedefaultvaluesforthephysicalinventorydocument
Reportingbatchinputs
Recordingtolerancesforphysicalinventorydifferences
Inventorysamplingaswellasconfigurationofcyclecounting
5.Whatisthedifferencebetweenmanagingstockbyquantityandmanagingstockbyvalue?

Transactionsthatmakechangesinthestockresultinstockupdatesthatarerecordedinrealtime.Atanypointintimeone
canviewthestockoverview,whichrepresentsthecurrentsituationatthattime.Thatistheessenceofstockmanagementby
quantity,andcanappliedtothefollowingstocktypes:
o Locatedinthewarehouse
o Orderedbutnotyetreceived
o Locatedinthewarehouseandreservedforaparticularpurpose
o Reservedforqualityinspection
Themanagingstockbyvalueoptionreviewsthestockmaterialsqualitativelyratherthanquantitatively.ThevaluatioNof
stockisdoneeitherattheplantleveloratthelocationlevel.Updatesthatcanbedonewhenmanagingstockbyvalueareas
follows:

o Thequantityandvalueforthegoodsmovement
o Theaccountsthatareassignedforcostaccounting
o TheG/Laccountsforfinancialaccounts,withautomaticassignmentofaccounts
Thevaluationareaistheorganizationallevelatwhichthestockvalueismaintained.Itcanbeeitheratplantlevelor
storagelevel.
6.WhatarethespecialstocksinSAP?
Specialstocksaredefinedasstocksthatmustbemanagedseparatelybyacompany.Theycanbeeithercompanyownedor
externalstocks.Theycanbecategorizedasfollows:

Consignment
Subcontracting
Stocktransferusingstocktransportorder
Thirdpartyprocessing
Returnabletransportpackaging
Pipelinehandling
Salesorderstock
Projectstock
7.WithwhichmodulesinSAPistheinventorymanagementintegrated?
InventorymanagementisanimportantpartoftheSAPMMmodule.Thebusinessactivitiesofanorganizationrevolvearound
theinventoryofmaterials,whichservesastheinputforthemanufacturingprocessortheinventoryofpreparedgoodsfor
deliveryorsale.Thematerialispurchasedfromtheappropriatevendorsonthebasisofrequestsfromthematerialsrequirement
planning(MRP)module.Thedelivereditemsarerecordedasthegoodsreceiptininventorymanagement.Thematerialsarethen
stored,eitherfordeliverytothecustomerorformanufacturingprocesses.Inventorymanagementisintegratedwithother
modules,suchasfinancialaccounting(FI),salesanddistribution(SD),productionplanning(PP),projectsystem(PS),and
qualitymanagement(QM).
8.HowistheinventorymanagementintegratedwithMM?
InventorymanagementisdirectlylinkedwiththeMMmodulebecauseanymovementofgoodstoandfrominventory
happensundertheMMmodule.MRP,purchasing,andinvoiceverificationaresomeoftheMMcomponentsthatarealso
linkedwithinventorymanagement.Aftermaterialisordereditispostedasagoodsreceiptwithreferencetothepurchaseorder.
Theactualdataofthequantitiesarecheckedinthevendor'sinvoice.
9.Whataretheinitialconfigurationstepsforinventorymanagement?

Thestepsforinventorymanagementareasfollows:
Definingplantparameters
Definingsystemmessageattributes
Definingnumberassignment
Defininggoodsissue,transferposting,screenlayout
Maintainingcopyrulesforreferencedocuments
Settingupdynamicavailabilitychecks
Confirmingthenegativeitems
10.WhatisGoodsmovement?Whattypeofdocumentsiscreatedaftergoodsmovement?
Goodsmovementreferstothemovementofstock.Thismovementofstockcouldbeeitherinboundfromthevendor,outboundto
acustomer,betweendifferentplants,orevenbetweendifferentstockswithinaplant.Aftergoodsmovement,theSAPsystem
createstwotypesofdocuments:materialdocumentsandaccountingdocuments.
11.WhatarethegoodsmovementsthattakeplaceinMM?
Thegoodsmovementscanbedefinedasthephysicalorlogicalmovementsofmaterialsthatleadtoachangeinstocklevelsor
resultsinmaterialconsumption.ThegoodsmovementsarepartoftheMMpolicy.ThegoodsmovementsinSAPareasfollows:
o GoodsreceiptRepresentsthephysicalmovementofgoodsormaterialsintothecompany.Itincreasesthestockquantity.
Thegoodsreceiptcanbeofthefollowingtypes:
Goodsreceiptwithreferencetoapurchaseorder
GoodsreceiptwithreferencetoaProductionorder
Goodsreceiptwithoutreference
o GoodsissueRepresentsthephysicalmovementofgoodsormaterialouTofthecompany.Itreducesthestockquantity.The
goodsissuecanbeofthefollowingtypes:
Goodsconsumptioninthecompany
Goodsdeliverytocustomers
o StocktransferRepresentsthemovementofmaterialsfromonelocationtoanotherlocation.Thelocationscanbeeither
withinthesameplantordifferentplants.
o TransferpostingRepresentsthestocktransferthatcaneitherbephysicalorlogical.Inlogicalstocktransfers,goodsare
transferredonlyinrecords,whiletheactualstocktransferdoesnoToccur.Someexamplesofphysicalstocktransferare:
Stocktransferbetweentwostoragelocationsinaplant
Stocktransferbetweentwoplants
Transferofmaterialstocustomerconsignmentstock

Someexamplesoflogicalstocktransferare:
o Releaseofmaterialsfromstockinqualityinspection
o Transferofmaterialsfromvendorconsignmentstocktoownstock
o Batchsplitting
o Transferpostingmaterialtomaterial

12.WhatisGoodsReceipt&GoodsIssue?

Goodsreceiptistheprocessthatenablesthereceiptofmaterialfromavendororfromtheinhouseproductionprocess.
ThereareothertypesofgoodsreceiptsinSAPthatincludeinitialstockcreation.Thegoodsreceiptprocessalsoincreasesstock
duetooneofthefollowingprocesses:
o Receiptofproductionorder
o Receiptofpurchaseorder
o Initialinventoryentry
o Others
Goodsissueisaprocessinwhichthestockinthewarehouseisreducedduetoanyofthefollowingreasons:

o Shipmenttoacustomer
o Stockwithdrawalforaproductionorder
o Returnofmaterials
o Materialrequiredforsampling
o Scrappingofmaterials

13.Whyisgoodsreceiptimportanttoacompany?
Goodsreceiptindicatesareceiptorinwardmovementofstockofmaterialsorgoods.Whenanexternalvendorprovidesstockto
thecompany,thegoodsreceiptisgeneratedasapurchaseorder,andwhenthematerialisproducedinhouse,thegoodsreceiptis
generatedasaproductionorder.Agoodsreceiptisimportanttoacompanybecauseusingagoodsreceiptmovesmaterialinto
stock ,updatesthestocklevels,andtherebyindirectlyenablestheproductionprocess.
14.Howisagoodsreceiptperformed?
Thestepstoperformagoodsreceiptareasfollows:
o Entertheheaderdata.
o Selectthemovementtypeandthepurchaseordernumber.
Thedocumentispostedinthedatabase.
15.HowdoyoupostthegoodsifthePOnumberisnotknown?
Ifthepurchaseordernumberisnotknown,youmustentersearchcriteriaforthepurchaseorderintheinitialscreen.Asa
result,thelistofpurchaseordersisdisplayed.Thedesiredpurchaseorderitemscanthenbecopied.
16.Howisthevendorreturnedprocessedwithoutapurchaseorderreference?
YoufirstneedtoobservetheReturncolumnandthenselectItemDetail>MIGO_GR>GoodsReceiptforPurchase
Order.Iftheintentionistodeductthestock ,thenmovementtype161isused;otherwise,162isusedtoundothechanges.
Lastly,youmustensurethatthedocumentisareturnpurchaseorder.Thedocumentisthensaved.

Alternatively,youcanusetheM21Ntransactioncodeforthispurpose.
17.Whathappenswhenagoodsreceiptisposted?
Whilepostingagoodsreceipt,thefollowingeventsoccur:
Thematerialdocumentiscreated.
Theaccountingdocumentiscreated.
Threeprintedversionsofgoodsreceiptnotesaremodified.
Thestocklevelchanges.
18.Whatistheresultofgoodsmovement?
Thefollowingeventsareinitiatedwhengoodsmovementstakeplace:
First,amaterialsdocumentisgenerated,whichisproofofthegoodsmovements.
Accountingdocumentsaregeneratedifthemovementofgoodsrequiresachangeinthefinancialaccounts.
Thestocksofthematerialsquantitiesareupdated.
Thestockvaluesinthematerialmasterareupdated.
Financialandmaterialdocumentsareupdated.