SAP MM :

SAP MM (Material Management) is a functional module in SAP that deals with procuremen
handling and material management. The MM module contains master data, system configuratio
transactions data to complete the procure to pay process.

ESSENTIAL COMPONENTS IN SAP MM : [procurement cycle (or) procure to pay cycle (or)
source to pay cycle]

1. Determine requirements

2. Source determination

3. Vendor Selection

4. Order Processing

5. Order follow up

6. Goods receipts and Inventory management

7. Invoice Verification

8. payment processing

MASTER DATA :
Master data is used as a base for any transaction. If you are producing, transferring stock,
selling, purchasing, doing physical inventory, whatever your activity may be, it requires
certain master data to be maintained.

Master Data's are

1. Material master data

2.Vendor master data

3.purchase info record

4.source list

5.Pricing/conditions master data

6.Warehouse management master data (storage bin master data)

7.customer master data

 8.service master data

TRANSACTIONAL DATA :

it uses the master data, Data relating to the day-to-day transactions--

-PR,

RFQ,

QUOTATION,

OUTLINE AGREEMENTS,

MIRO,

MIGO,

SERVICE ENTRY SHEET

SAP IMPLEMENTATION METHODS

1. VSAP--value sap methodology

2. ASAP--accelerated sap methodology(NOW USING THIS METHOD)

 It is helped to design SAP implementation in more efficient manner

 Effective optimization of time, people, quality, and other resources
 5 phase process

a)project preparation :

identifying team members and developing strategy as how to go and implement

b)buisiness blue print :

consists of identifying client current process and requirements and how SAP
provides solution by documenting organizational units, master data, business scenarios,
that you require to implement

c)realization (training & data migration) :

based on blue print we have to implement business process and requirements

i.e; customizing, developing, testing.
 d)final preparation :

end user training and documentation

e)go-live & support

MASS MAINTANANCE OF MATERIALS IN SAP :

In order to create multiple materials at once, you should have access to a function
like

 eCatt tool
 LSMW(Legacy System Migration Workbench)
 BDC (Batch Data Communication) recordings
 BAPI (Business Application Programing Interface)

PURCHASING ORGANISATION :
it will take care of all procurement needs of the company other organizational units
send their needs to this organization.it will identify and negotiate with vendors for one
more plants.

a)central purchasing organization

b)distributed/company code specific purchasing organization

c)plant specific purchasing organization

CONTROLLING AREA :
it is an organizational unit. it controls the expenditure and earnings.it maintains the
indvidual a/c books for both expenditure and earnings

MATERIAL VALUATION :
materials in company will be valuated at two levels

1) at company code level

2) at plant level

PLANT :
it is an organizational unit, it is called as factory.
 in this plant--manufacturing activities

assembly activities

testing activities

sales activities can be carried out

STORAGE LOCATION :
it is an organizational unit. it will take care of all inventory activities

MATERIAL MASTER RECORD :

information about a material should be stored in a central master
record. Each user department does not have to create its own material master record as
this would result in unnecessary data redundancy.individual departments can be able to
access the data relevant to their needs as easily as possible. for example, In plant A, the
material is required for production purposes, whereas in plant B it is only used as a spare
part

The data stored in the material master record is required for many purposes:-

basic data is required for information

Purchasing data is required for ordering purposes

Accounting data is required for material valuation

it is a record consists of complete information of a

specific material like--- material name

base unit of measure

alternate unit of measure

material type

material group

gross weight
 net weight

purchase group

price control

valuation class

material price

it is a data sheet of the material

MATERIAL:
it is the smallest unit in an industry which uses to make a product

examples--tire, tube, rim, nut etc;

MATERIAL TYPE :
materials catagorized based on its attribute(purpose),37 material types are defined
by SAP

examples:- ROH(raw material)

HALB(semi-finished product)

FERT(finished product)

HAWA(trading materials)

ESRT(spare parts) etc:

MATERIAL GROUP :
materials catagorized based on its characteristics

examples:- metal group

rubber group

liquid group

plastic group

glass group
PURCHASING GROUP :
An group of people who are responsible totake are of all procurement activities of the
materials

PURCHASE REQUISITION :
* it is a transactional data.

* it is an internal document.

* it is a request to purchasing department/organization to procure particular quantity of

material or service for a particular date.

* purchasing organization will receive these PR's from various departments.

* PR does not have header data

* also known as indent form (or) requisition slip (or) intra office note/memo.

REQUEST FOR QUOTATION :

* it is a transactional data.

* it is an outgoing document from company on our letter head.

* it is an simple invitation to various vendors to offer their quotation for our

requirement.

* it consists of quotation deadline for submission

QUOTATION :
* it is a response from the vendor for our invitation(RFQ).

* it is a commitment from vendor to supply the specific material at specific price as per
the delivery dates.

* it consists--vendor offer price, terms & conditions.

PURCHASE INFO RECORD :

* it is a master data
 * it is the relation b/w specific material to a specific plant by a specific vendor along with
his price, terms & conditions.

* once you maintain PIR system will suggest the price when you create purchase order.

* it is a one-to-one relation.

* throgh PIR you can maintain scales, pricing, free goods maintanance.

SOURCE LIST :
* To have an excellent control on purchase documents creation of SL is used

* it is a master data.

* it is the relation b/w material and vendor along with their validity periods.

* it is one-to-many relation.

* system will allow the list of vendors maintained in SL for creation of puchase
documents

* system will allow the list of vendors maintained in SL as per validity periods.

* you can block/fix a vendor for specific material

OUTLINE AGREEMENTS :
Out Line Agreement

 It is a long time Agreement

What is an Agreement?

 It is a common understanding between two parties to supply certain

material on specific terms and conditions
 Normally this agreements are entered between Vendors and company on mutual
benefit base

Why Agreement is needed?

 In general to keep the vendor to supply the material for a long

term for a specific price companies will enter this type of
Agreements
  In order to keep the vendor to bind for agreement companies will assure the
vendor

Is this agreement can be entere d for all materials?

 No.
 Generally out line agreements are for the high volume and Low
value type materials like NUTs, Washers etc.

Types of Outline Agreements

Based on the assurance of the company the agreements are two types

o Contracts
o Scheduling Agreement
CONTRACTS:
 It is an outgoing document
 It is a long term agreement
 It is a legal document
 Contract will between company and vendor
 In contract
o Company assures certain Quantity of the material or value of the material,
o Vendor will commit the price
 In Contract there is no delivery date column
 As and when company needs material from the vendor, It has to create
a separate PO w.r.t. to contract for that qty along with delivery date
 System will validate
o The vendor, Material, Plant and validity period and Targeted Qty or Values
o Once PO is created, the contract will also be updated accordingly
 Note: The PO which is created w.r.t Contract can also be called as Release order

Types of contracts

Based on the assurance of the company the contracts are two types

- Qty contract
- Value contract
Mention what are the major purchasing tables? List the transaction codes for them?

 Purchase requisition > EKBN

 Purchase requisition account assignment > EBKN
 Release documentation > EKAB
 History of purchase documents > EKBE

SPECIAL STOCK

These stocks did not belong to company and these are being kept at particular location

 What is planned delivery

The meaning of planned delivery is the number of business days in which the person is
expected to receive the materials and goods.
GR PROCESSING TIME
The GR processing time is the number of business day in which the person has to inspect
and place the material in the storage, after obtaining the goods and materials.
 Explain what is reservation
Reservation is the blocking of the stock beforehand so that its availability is ensured later
in time. It ensures that the stock is made available and can be used as per requirement .