Material Management

Contents
1.

Enterprise structure
1.1
Creating Company
1.2
Creating Company code
1.3
Assigning company code to company
1.4
Defining plant
1.5
Assign plant to company code
1.6
Creating Purchasing organization
1.7
Assigning Purchasing organization to company code
1.8
Assigning Purchasing Organization to Plant
1.9
Creating Storage Location
1.10
Creating Purchasing Group
1.11
Reference Purchasing Organization
1.12
Standard Purchasing Organization

2.

Master Data
2.1
Material Master
2.1.1
Types and Information of material master
2.1.2
Levels of Data stored in Material Master
2.1.3
Controlling Functions of Material Type
2.1.4
SAP Standard Material types
2.1.5
Procurement of UNBW – Non-Valuated Materials
2.1.6
Procurement of NLAG – Non-Stock Materials
2.1.7
Changing the Materials Type of a material master
2.1.8
Material Master Table
2.1.9
Standard And Moving Average price
2.1.9.1
Standard Price (S)
2.1.9.2
Moving Average Price (V)
2.1.10 Blocking Of Material
2.1.11 Data Screens in Material Master Maintenance
2.2
Vendor Master
2.2.1
Levels of Data stored in Vendor Master
2.2.2
Vendor Account Group
2.2.3
One-Time-Vendor Master
2.2.4
Vendor Sub-Range
2.2.5
Vendor Partner Roles
2.2.6
Reconciliation Accounts
2.2.7
Vendor Master Data
2.3
Purchase Info record
2.3.1
Purchasing info records types
2.3.2
Purchasing info records tcodes
2.3.3
Ways of Creating Purchase Info Record
2.3.4
Purchasing info records Tables
2.3.5
Levels of Data stored in Purchasing info records
2.3.6
Scales in Info-Record
2.4
Sourcelist
2.4.1
Source List is used for the following
2.4.2
Configuration
2.4.3
Sequence of Source of supply in Purchase order
2.4.4
In Source list below can be the source of supply
2.5
Quota Arrangement
2.5.1
Configuration
2.5.2
Calculating the Quota Rating
2.5.3
Priorities in Source Determination

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2.5.4
2.5.5
3.

Important consideration in Quota Arrangement

Quota Base quantity calculation procedure

Transactional Data
3.1
Purchase Requisition – ME51N
3.1.1
Purchase Requisition Table
3.2
RFQ & Quotation
3.2.1
Tcodes of RFQ and Quotation
3.2.2
Documents types of RFQ
3.3
Outline Agreement – Contract
3.3.1
TCodes of Outline agreement-Contract
3.3.2
Types of Outline Agreement
3.3.3
Types of Contract
3.3.4
Types of Scheduling Agreement
3.3.5
Different Ways to create Contract
3.3.6
Item Category
3.3.6.1
Item Category M (Material Unknown)
3.3.6.2
Item Category W (Material Group)
3.3.7
Contracts v/s Scheduling agreement
3.3.7.1
Contracts
3.3.7.2
Scheduling Agreement
3.4
Purchase Order
3.4.1
Purchase Order Tcodes
3.4.2
Different Ways to create PO
3.4.3
Different Purchase Order Document types
3.4.4
Document Type controls
3.4.5
Price Flows in PO
3.4.6
Types of Procurement
3.4.7
Item Category
3.4.8
Account Assignment Category
3.4.9
Importance of GR-Bsd IV Flag in PO
3.4.10 Delivery completed indicator
3.4.11 PO Without material Master Record
3.4.12 GR-Non Valuated Indicator
3.4.13 Confirmation control Key in PO
3.4.14 Delivery Schedule in PO
3.4.15 Blanket/Frame Work PO
3.4.16 Invoicing Plan in PO
3.4.16.1
Two types of invoicing plan
3.4.16.2
Pre Requisites
3.4.16.3
Procedure
3.4.17 PO Tables
3.4.18 Accounting Entries in Simple PO
3.4.19 Version Management
3.4.20 Parameters EFB & EVO
3.5
Creation of Purchase Order Automatically
3.5.1
Creation of Purchase Order Automatically
3.5.1.1
Create Purchase Order Automatically in Purchasing
3.5.1.2
Create Purchase Order Automatically in Inventory Management
3.6
Release Strategy
3.6.1
Different Types of Release Procedure
3.6.2
Configuration of release strategy needs these following components
3.6.2.1
Characteristics
3.6.2.2
Class
3.6.2.3
Configure Release Group
3.6.2.4
Configure Release Codes

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4.

5.

3.6.2.5
Configure Release Indicator
3.6.2.6
Configure Release Strategies
3.6.3
Tcodes
3.7
Planning process
3.7.1
Planning Process
3.7.2
MRP Controller
3.7.3
MRP Type
3.7.4
Difference between MRP & CBP
3.7.4.1
Material requirement planning
3.7.4.2
Consumption Based Planning
3.7.5
MRP Material requirement planning – MRP Type is PD
3.7.6
Consumption Based Planning (MRP Procedures Supported in CBP)
3.7.7
Reorder Point Planning
3.7.8
Manual Reorder Point Planning – MRP TYPE VB
3.7.9
Automatic Reorder Point Planning – MRP Type VM
3.7.10 Forecast Based Planning – MRP Type VV
3.7.10.1
Process Steps
3.7.10.2
Process Details
3.7.10.2.1
Maintain consumption values (MM02)
3.7.10.2.2
Execute Forecast ( MP30)
3.7.10.2.3
Stock Requirement List (MD04)
3.7.10.2.4
Run MRP (MD03)
3.7.11 Time-phased planning
Inventory Management and Physical Inventory (MM-IM)
4.1
Effects of Goods Movement
4.2
Stock Types
4.3
Important Tcodes in Inventory
4.4
Goods Receipt when PO is unknown
4.5
Settings required in system to send Goods Receipt message to buyer
4.6
Transfer Posting – MB1B
4.7
Stock Transfer (Without STO) – MB1B
4.8
Stock transfer relevant for Valuation
4.9
Difference between Transfer posting and Stock Transfer
4.10
Tables of Inventory Management
4.11
GR Blocked Stock
4.12
Difference between GR Blocked stock and Blocked stock
4.13
Inbound and Outbound Delivery
4.13.1 Inbound Delivery – VL31N
4.13.2 Outbound Delivery – VL01N/VL10B
4.14
Document Types of inventory Management
4.15
Important Movement Types in MM
4.16
Stock types considered in Physical Inventory procedure
4.17
Physical Inventory procedure carried levels
4.18
Negative Stock
4.19
Prerequisites
4.20
Example of Negative Stock
4.21
Stocks
4.22
Goods Withdrawal
Subcontracting
5.1
Process of Subcontract in MM
5.2
Pre-Request
5.3
Master Data Setting
5.4
Accounting Entries in Subcontracting PO
5.5
Different Scenarios
5.5.1
Scenario: 1
Providing R/W Materials to subcontracting vendor From Another Vendor

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5.5.2

Scenario: 2
Subsequent Adjustment In Process Of Subcontracting – MB04 (Mvt 121)
5.5.3
Scenario: 3
By-Products in Subcontracting
6. Consignment
6.1
Consignment Process
6.2
Accounting Entries for Consignment
6.3
Automatic generation of Consignment Purchase requisition
7. Stock Transfer & Stock Transport Order
7.1
Types of Stock Transfer – MB1B (Without STO)
7.2
Stock Transfer between Plants in One Step (Mvt 301 – Tcode MB1B)
7.3
Stock Transfer between Plants in Two Steps (Mvt 303 & 305 – Tcode MB1B)
7.4
Types of Stock Transfer Order
7.4.1
Stock Transport Order without Delivery (Same Company code)
7.4.2
Stock Transport Order with Delivery via Shipping (Different Company code/Inter
Company
code STO via the SD Component)
7.4.3
Stock Transport Order with Delivery & Billing Document/Invoice (Different Company
code/Inter Company code STO via the SD Component)
7.5
Configuration Steps for STO
8. Third-Party Processing
8.1
Third-Party Processing
9. Automatic Account Determination
9.1
Account Determination Process
9.2
Assigning Valuation Class to Material Type via Account Category Reference
9.2.1
Movement Type
9.2.2
Value String
9.2.3
Transaction Event Key
9.2.4
Account Modifier
9.2.5
Valuation Group Code
9.2.6
Valuation Area
9.2.7
Valuation Class
9.3
List of Transaction Event Keys
9.4
Delivery Cost in PO
9.5
Value string WA01 defined for
10. Pricing Procedure
10.1
Pricing Procedure: Price Determination process in a PO
10.2
Process Steps
10.2.1 Determine the condition tables
10.2.2 Determine the access sequence – 0002
10.2.3 Determine the condition type – PB00
10.2.4 Define Calculating Schema – RM0000
10.2.5 Define schema group
10.2.6 Assignment of Schema Group of Vendor, Schema Group Purchasing Organization
and
Calculation Schema
10.2.7 Maintain Condition record(MEK1)
11. Logistics Invoice Verification (MM-IV-LIV)
11.1
Important data for Invoice Verification
11.1.1
Master data
11.1.2
Transaction data
11.2
Invoice Transaction (MIRO)
11.2.1 Invoice
11.2.2 Credit memo
11.2.3 Subsequent debit
11.2.4 Subsequent credit
11.3
Document Parking/Invoice Parking (MIR7)
11.4
Prepayment

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11.4.1 Prerequisites
Invoice Verification in the Background (MIRA)
Important Accounts for Invoice Verification
11.6.1 Vendor Account
11.6.2 Stock Account (BSX)
11.6.3 GR/IR Clearing Accounts (WRX)
11.6.4 Tax Accounts
11.6.5 Price Differences Accounts (PRD Account)
11.6.6 Cash Discount Clearing Account
11.6.7 Freight Clearing Account (FRL)
11.7
Direct Posting
11.7.1 Invoices from One-Time Vendors
11.8
Posting Taxes
11.9
Cash Discounts
11.10 Invoice with Variances
11.10.1 Four different types of variance
11.11 Blocking Invoices
11.12 Invoice Release (MRBR)
11.13 Delivery Costs
11.13.1 Planned Delivery Costs
11.13.2 Unplanned Delivery Costs
11.14 Subsequent Debits/Credits
11.15 Automatic Settlements
11.15.1 Evaluated Receipt Settlement (MRRL)
11.15.1.1
Prerequisites
11.15.2 Consignment and Pipeline Settlement (MRKO)
11.15.2.1
Constraints
11.15.3 Invoicing plan settlement (MRIS)
11.15.4 Revaluation (MRNB)
11.16 Credit Memo
11.17 Reversals/Cancel (MR8M)
11.18 Invoices Received via EDI
11.18.1 Constraints
11.19 Archiving Invoice Documents (MRA1/ MRA2/ MRA3/ MRA4)
11.20 Tcodes
SAP Methodology
12.1
Project preparation
12.2
Business Blueprint
12.3
Realization
12.4
Final Preparation
12.5
Go-Live Support
System landscape
13.1
Meaning of "R" in R/3 systems
SAP Projects & Testing Methods
14.1
Types of SAP Projects
14.1.1 SAP Implementation Project
14.1.2 SAP Support Project
14.1.3 SAP Roll-Out Project
14.1.4 SAP Up gradation Project
14.2
Testing Methods in SAP Projects
14.2.1 Development Unit Testing
14.2.2 Security Testing
14.2.3 Integration Testing
14.2.4 User Acceptance Testing (UAT)
14.2.5 Regression Testing
Types of Calls/Tickets & SLA
11.5
11.6

12.

13.
14.

15.

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15.1
Types of Calls
15.2
SLA – Service Level Agreement
15.3
SLA for Incidents
15.4
SLA for Change Request
15.5
SLA FOR Problem Tickets & Service Request
16. Configuring SAP for Inbound and Outbound Processing
16.1
Overview of Partner Profile
16.1.1 Partner Profile in IDOC
16.1.2 IDOC and Usage in SAP
16.1.3 Port in IDOC – WE21
16.1.4 Process Codes in IDOC
16.1.5 Message type in IDOC
16.2
Configuring SAP Inbound Processing
16.2.1 Defining Logical System – BD64
16.2.2 Configuring distribution Model
16.2.3 Defining Partner Profiles – WE20
16.3
Configuring SAP Out-bound Processing
16.3.1 Defining Logical System – BD64
16.3.2 Configuring distribution Model
16.3.3 Defining Partner Profiles – WE20
16.4
Partner profile for vendors

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1. Enterprise Structure
1.1 Creating Company
IMG menu

SproIMGEnterprise Structure Definition Financial

Accounting Define Company

1.2 Creating Company Code

Transaction code
IMG menu

OX02
SproIMGEnterprise Structure Definition Financial
Accounting Edit, Copy, Delete, Check Company Code

1.3 Assigning Company Code to Company

IMG menu

SproIMGEnterprise Structure AssignmentFinancial

Accounting Assign Company code to Company.

1.4 Defining Plant

A manufacturing facility is called a plant.
Transaction code

OX10

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IMG menu

SproIMGEnterprise Structure Definition

Logistics - General Define, copy, delete, check plant

1.5 Assigning Plant to Company Code

Transaction code
IMG menu

OX18
SproIMGEnterprise Structure Assignment Logistics GeneralAssign Plant to
Company Code

1.6 Creating Purchasing Organization

The purchasing department is mapped as a purchasing organization in the SAP Sytem.
Transaction code
IMG menu

OX08
SproIMGEnterprise Structure Definition Materials
Management Maintain purchasing organization

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1.7 Assigning Purchasing Organization to Company Code
Transaction code
IMG menu

OX01
SproIMGEnterprise Structure Assignment Materials
Management Assign purchasing organization to company code

1.8 Assigning Purchasing Organization to Plant

Transaction code
IMG menu

0X17
SproIMGEnterprise Structure Assignment Materials
ManagementAssign purchasing organization to plant

1.9 Creating Storage Location

Transaction code
IMG menu

1.10

OX09
SproIMGEnterprise Structure Definition Materials
Management Maintain Storage Location

Creating Purchasing Group

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It is a buyer or group of buyers responsible for certain purchasing
activities.Internally responsible
for the procurement.
Also Purchasing Group is floating entity and it will not assigned to any level.
Transaction code
IMG menu

1.11

OME4
SproIMGMaterials Management Purchasing Create
Purchasing Groups

Reference Purchasing Organization:

Reference Purchasing Organization is assigned to plant purchasing organization. The

reference
purchasing organization can negotiate with vendor and create global outline
agreements (Contracts and
scheduling agreements). Then plant purchase organization can create purchase orders
to vendor with
referring global outline agreements.

1.12

Standard Purchasing Organization:

Standard Purchasing Organization is assigned to plant. Which is used to create

automatic
purchase orders (In automatic purchase order system needs to find the purchasing
organization.
The system gets the plant code from the purchase requisition and from the plant
code system
determines the standard purchasing organization)

2. Master Data
2.1 Material Master
MM01 – Create Material Master
MM02 – Change Material Master
MM03 – Display Material Master
MM04 – Display changes
MM60 – Material list
MM50 – For extending Material views
MMAM – Change the Material type
MM06 – Flagging Material for deletion
2.1.1

The following list shows some types of information a material master record
contains
and provides examples of each.
 Accounting
Valuation and costing/price calculation information. Examples: Standard price, past
and
future price, and current valuation.
 Materials planning and control

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





Information for material requirements planning (MRP) and consumption-based

planning/inventory control. Examples: Safety stock level, planned delivery time,
and reorder
level for a material.
Purchasing
Data provided by Purchasing for a material. Examples: Purchasing group (group of
buyers)
responsible for a material, over- and under delivery tolerances, and the order
unit.
Engineering
Engineering and design data on a material. Examples: CAD drawings, basic
dimensions, and
design specifications.
Storage
Information relating to the storage/warehousing of a material. Examples: unit of
issue,
storage conditions, and packaging dimensions.
Forecasting
Information for predicting material requirements. Examples: How the material is
procured,
forecasting period, and past consumption/usage.
Sales and distribution
Information for sales orders and pricing. Examples: Sales price, minimum order
quantity, and
the name of the sales department responsible for a certain material.

2.1.2 Levels of Data stored in Material Master:

A. Client - general data
This level contains the data applicable to all individual group companies, all
plants, and all
warehouses/stores belonging to an enterprise (corporate group). All general data
stored at client Level.

B. Plant level Data

This level contains the data for each branch or plant location within a certain
company. The data important
to Purchasing is stored at this level.

C. Storage location Level

This level contains the data specific to a storage location.

2.1.3 Controlling Functions of Material Type:

It is group of Material having same basic attributes
A. Number Assignment (Internal or External)
B. Number range
C. Procurement type (Internal or External)
D. Allowed Views, Field selection and screen sequence.
E. Price control (Standard or moving average price)
F. Account determination (Determine valuation class)
G. Quantity and value updates in plants.
H. Field Reference keys
I. X-Plant Material status

2.1.4 SAP Standard Material types:

 FERT - Finished products
Finished products are produced in-house. Since they cannot be ordered by
Purchasing, a material
master record of this material type does not contain purchasing data.

 NLAG – Non-stock materials

Non-stock materials are not held in stock because they are consumed immediately.
In this type we cannot manage these goods are neither on a quantity basis nor on a
value
basis.
 UNBW – Non-valuated materials
Non-valuated materials are managed on a quantity basis, but not by value.

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 VERP - Packaging materials
Packaging materials are used to transport goods and come with the goods free of
charge. A
material master record of this material type is managed on both a quantity basis
and value basis.
 PIPE - Pipeline materials
Materials such as oil, power, or water that flow into the production process
directly from a
pipeline,
 ROH - Raw materials
Raw materials are always procured externally and then processed. A material master
record of
this type contains purchasing data, but not sales data since they cannot be sold.
 HALB – Semi-finished products
Semi-finished products can be procured externally and manufactured in-house. They
are then
processed by the company. A material master record of this material type can
contain both
purchasing and work scheduling data.
 DIEN - Services
Services can be performed internally or procured externally (outsourced). They
cannot be stored
or transported.
 ERSA - Spare parts
Spare parts are used to replace defective parts. They may be kept in stock. A
material master
record of this material type can contain purchasing data, but not sales data.
 HAWA - Trading goods
Trading goods are always procured externally and then sold. A material master
record of this
material type can contain purchasing data and sales data.

2.1.5 Procurement of UNBW – Non-Valuated Materials

 While doing PO for this type of materials account assignment category is
mandatory example
“K”.
 These types of materials won’t have accounting view.
 Non-valuated materials are managed on a quantity basis, but not by value.
 When you enter an invoice, you can change the account assignment as long as the
goods
receipt was Non-valuated (Because There is no accounting entries at the time of
GR).

2.1.6 Procurement of NLAG – Non-Stock Materials

 While doing PO for this type of materials account assignment category is
mandatory example
“K”.
 We cannot manage these goods are neither on a quantity basis nor on a value
basis.
 These materials are Not managed on a quantity basis nor value basis.
 When you enter an invoice, you can change the account assignment as long as the
goods
receipt was Non-valuated (Because There is no accounting entries at the time of
GR).

2.1.7 Changing the Materials Type of a material master – MMAM

Material Type can be changed using transaction MMAM
 Prerequisites:
 Configuration of both material types must be similar (OMS2 - Material Type
configuration)
 There should be no open PO's against this material
 There should be no valuated stock against this material (MMBE - Zero Stock)
 There should be no open line items against vendors for this material (see
transaction
FBL1N - Vendor Line Item display).

2.1.8 Material Master Table:

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MARA – Material Master General data
MARC – Material Master Plant data
MARD – Storage location data
MVKE– Material Master sales data
MAKT – Material description data
MBEW – Material Valuation data
MARM – Unit of Measure

2.1.9 Standard And Moving Average price:

2.1.9.1 Standard Price (S):
This is the price in which the material is valuated without taking goods movement
and
invoice into account.
Material – CLS9017-100EA
Standard Price (V) of Material – 117 CNY
PO Price – 120 CNY & Fright – 3 CNY
Accounting Document
 Stock/Inventory account (BSX) = 117 CNY
 GR/IR OR Vendor account (WRX) = -120 CNY
 Fright (FRL) = -3 CNY (This amount is not paying to vendor)
 Price difference (PRD) = ((PRD+BSX)-(WRX+FRL)) = 6 CNY
NOTE: PRD (Price difference account) come into picture only for Standard price
material
2.1.9.2 Moving Average Price (V):
This is the price in which the material is valuated taking goods movement and
invoice
into account.

Total Value
Moving Average Price = ------------------Total Quantity
Total Value = Balance on hand value + Goods receipt value.
Total Quantity = Balance on hand Quantity + Goods receipt Quantity.
Material – CLS9018-100EA
Moving Average Price (M) of Material – 117 CNY
PO Price – 120 CNY & Fright – 3 CNY
Accounting Document
 Stock/Inventory account (BSX) = 126 CNY
 GR/IR OR Vendor account (WRX) = -120 CNY
 Fright (FRL) = -3 CNY (This amount is not paying to vendor)
NOTE: PRD (Price difference account) will not be triggered in Moving average Price

2.1.10 Blocking Of Material:

A. Blocking material at client level –Basic Data view – X Plant Matl status should
be 01
B. Blocking Material at plant level – Purchasing view – Plant Sp Matl status should
be 01

2.1.11 Data Screens in Material Master Maintenance

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2.2

Vendor Master Data

2.2.1 Levels of Data stored in Vendor Master:

A. General Data
Data that applies equally to each company code within your enterprise (address,
telephone number,
language in which you communicate with your vendor, etc.).

B. Company code Data (Accounting Data) – FK01

Data kept at company code level (payment transaction data or number of control
account, for
example).

C. Purchasing Data – MK01

Data that is of importance with regard to your enterprise’s purchasing activities
and which is kept at
purchasing organization level (such as contact person or terms of delivery).
It we want to maintain accounting data and purchasing data together then we are
using XK01.

2.2.2 Vendor Account Group:

It is used to categorize vendors, and vendors similar in nature are grouped
together (such as one-time
vendors, domestic vendors, overseas vendors, employee vendors, and so on).


Vendor Account Group controls:

 Field selection in the vendor master (Required & suppress field).
 Number Assignment (Internal or External)
 Number range interval
 Vendor status (It determines whether the vendor is a one-time vendor) that means
particular use


of vendor master record in our business.

Partner Schema (Determine which partner schemas are valid).

2.2.3 One-Time-Vendor Master:

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 In one time vendor we are not maintain master data. Because the details of the
vendor is
entered only at the time of entering invoice..
 You can create special vendor master records for vendors from whom you procure
goods
only once or rarely, so-called One-Time Vendor Master Records.
 When creating a "one-time vendor" master record, you must assign a one-time
account group.
This account group determines that the vendor-specific fields are suppressed. You
don’t need
to enter this data until the time a purchasing document (e.g. a PO) is created.
 When you create a purchasing document with a one-time vendor, you will be asked
to enter
the vendor address. Enter the vendor’s name and address. Like all other master
records, you
can display, block, or delete one-time vendor master records.

2.2.4 Vendor Sub-Range:

Vendor Sub-Ranges (VSRs) subdivide a vendor's total product range according to a
variety of
criteria. You can specify which materials or articles belong to which VSR in the
info records
of the relevant vendor

2.2.5 Vendor Partner Roles:

The Business Partner "vendor" can assume different roles in its dealings with
another
enterprise. Accordingly, in a procurement transaction, the vendor is first the
ordering
address, then the supplier of goods, then the invoicing party, and finally the
payee. For this
reason, several partner roles (partner functions) can be assigned to the vendor.
 ordering address (OA) – If you define another partner for the partner role BA, a
standard PO or release order will not be sent to the address of the vendor (role
LF)
but to the ordering address of the partner.
 Supplier of Goods/Goods Supplier (GS) – If you define another partner for the
partner role WL, the address of the goods supplier will be determined for return
deliveries in Inventory Management.
 Invoicing Party (PI) - If you define another partner for the partner role RS, the
invoicing party’s account will be charged instead of the vendor’s.
 Payee - A person or organization that receives a payment

2.2.6 Reconciliation Accounts:

When you create a vendor master created. You need a unique number for the creditor.
This is
assigned either automatically or manually by the administrator, depends on account
group.
The Reconciliation Account is G/L account in G/L accounting.

2.2.7 Vendor Master Table:

LFA1 – Vendor Master General data
LFB1 – Vendor Master Company code data
LFM1 –Vendor Master purchasing organization data

2.3

Purchasing Info Record

In purchasing info records. You maintain information about the relationships
between vendors and their
material.

2.3.1
A.
B.
C.
D.

Purchasing info records types:

Standard info record
Subcontracting info record
Consignment info record
Pipeline info record

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2.3.2 Purchasing info records tcodes:
ME11 - Create Purchasing info record
ME12 - Change purchasing info record
ME13 - Display purchasing info record
ME17 - Archive info records
MEK1 - Create Conditions

2.3.3 Ways of Creating Purchase Info Record

A. Manual Entry
B. Update from PO
C. Update from quotation

2.3.4 Purchasing info records Tables:

EINA - Purchase Info Record: General
EINE - Purchasing info record: purchasing organization data
KONP - Condition Item
KONH - Condition Header

2.3.5 Levels of Data stored in Purchasing info records:

A. General Data
Data that applies equally to each company code within your enterprise (Material No,
Vendor address,
telephone number, language in which you communicate with your vendor, etc.).

B. Purchasing organization Data

Delivery time, Minimum quantity, gross price, price, discounts, price history,
Text, Etc…

C. Purchasing Organization/Plant Data

Delivery time, Minimum quantity, gross price, price, discounts, price history,
Text, Etc…

2.3.6 Scales in Info-Record

 Suppose Vendor has agreed to provide a material in the following prices:
1 EA – 100 CNY
If the Gross price of the PO is more than 10000 CNY then he is agreed to give 10%
discount
If the Gross price of the PO is more than 100000 CNY then he is agreed to give 20%
discount


Based on this the system will fetch the prices into the PO automatically referring
the gross price of the PO.
If the PO gross price is 20000 CNY then relevant price in the PO taken
automatically discount as 10%.

 Now these scales can be maintained for the Vendor and Material combination in the
following
transactions: MEK1 - Pricing Condition Records “OR” ME11 - Purchasing Info Record
(conditions tab)
 Example: We will maintain the Scales in Inforecord ME11
Condition Tab of Inforecord
Gross price – PBOO – 100 CNY
Vendor Discount “RL01” – 10 % then click on scales (Call condition type RL01 in
Inforecord)

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Now enter scales value

If gross price is 10000 CNY then 10% discount
If gross price is 100000 CNY then 20% discount
SAVE

Now Create PO to check the scales

Quantity = 99, Net price = 100, Gross Price = 9900, Vendor discount = NIL

Quantity = 150, Net price = 90, Gross Price = 15000, Vendor discount = 10% (1500
CNY)

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(Vendor discount 10% came automatically in PO because scales maintained in
Inforecord for
condition type RL01)

Quantity = 1500, Net price = 80, Gross Price = 150000, Vendor discount = 20% (30000
CNY)
(Vendor discount 20% came automatically in PO because scales maintained in
Inforecord for
condition type RL01)

Note:






Purchasing info records can be created with Material Master data

Purchasing info records also can be created without Material Master by using
Material group.
Purchasing info records can be created/updated automatically by setting the info
update indicator while
maintaining a quotation, PO, or Outline agreement.
Scales can be maintained in ME11 (Condition Tab) by calling appropriate condition
type, And if we
maintain scales in Inforecord then it is not necessary to maintain condition record
in Tcode MEK1
 MEKI Scales – Discount is Applicable to all materials for that vendor in purchase
organization
level.
 ME11 Scales – Discount is Applicable to particular material and vendor
combination in that plant
level.

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2.4 Source List - ME01







2.4.1

Source List is used for the following:







2.4.2

Source List creation: ME01

Display source list - ME03
Display changes to source list - ME04
Activate Source List at plant level: OME5
Source list can be created automatically from a purchasing info record and an
outline
agreement.

Maintaining a fixed source of supply by selecting fixed indicator.

Limiting the selection of sources of supply during the source determination
process.
Blocking a source of supply.
Validity period of source of supply.
MRP Run –if you want a particular source of supply to be considered during the
planning
run.

Configuration:
 If you want to make a Source list mandatory for a material. You can set the
source list
required indicator in the material master record (Purchasing view) of that
material.
 If you wish to make the source list mandatory for all materials in a plant then
configure in
OME5.

2.4.3 Sequence of Source of supply in Purchase order

A.
B.
C.
D.

Quota Arrangement
Source list
Outline agreement
info record

2.4.4 In Source list below can be the source of supply

A.
B.
C.
D.

Vendor
Contracts
Quota Arrangement
Scheduling Agreement

2.5 Quota Arrangement – MEQ1

Distributing POs among the sources of supply in a systematic manner is called Quota
arrangement.
2.5.1 Configuration:
If you want to use quota arrangement for a material, it has to be set in the
purchasing view of a
material master record

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2.5.2 Calculating the Quota Rating:
Quota allocated quantity + Quota base quantity
Quota Rating = ------------------------------------------------------------Quota
 Quota Rating– This is the rating used by the system to determine the source
 Quota Allocated Quantity– This is the total allocated quantity from all
purchasing
documents for vendor.
 Quota base quantity – The quota base quantity is treated as an additional quota-
allocated
quantity. (This is used when new source of supply is introduced).
 Quota – This is the number that specifies which portion of a requirement should
be
procured from a given source of supply.
2.5.3 Priorities in Source Determination:
A. Quota Arrangement
B. Source List
C. Outline Agreement
D. Info Record
2.5.4 Important consideration in Quota Arrangement:
1. The source (vendor) having less quota rating is selected as effective source
2. In the case of quota rating of zero (that is the quota allocated quantity +
quota base
quantity have the value 0) or if more than one source has a quota rating of zero,
the one
with the highest quota is the effective source.
3. The quota base quantity should be used if a new source is included in a existing
quota
arrangement.
4. Quota arranged vendors should have info record to respective material.
2.5.5 Quota Base quantity calculation procedure
 Individual Calculation
 Collective Calculation

3. Transactional Data
3.1

Purchase Requisition – ME51N

ME51N - Create purchase requisition
ME52N - Change purchase requisition
ME53N - Display purchase requisition
ME54N - Release purchase requisition

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RFQ

Manual

Purchase
Requisition

Automatic Via MRP

Outline Agreement

ME51N
Sales Order
Purchase Order





3.1.1

Purchase Requisition are internal document

Price flows to PR from Material Master
MRP is created when material is in Bill of Material
Manual request is made when material is not in the Bill of material.

Purchase Requisition Table:

EBAN - General data
EBKN - Any account assignment data related to requisition

3.2 RFQ & Quotation

3.2.1 TCodes of RFQ and Quotation:
ME41 – Create Quotation (Create RFQ)
ME42 – Change Quotation (Change RFQ)
ME43 – Display Quotation (Display RFQ)
ME47 – Quotation
ME49 – Price Comparison

Manual

Vendor B
Purchase
Requisition

PO

Vendor A
RFQ

Outline
Agreement

Quotation
Rejection
Letter

Vendor C
Purchase
Order

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3.2.2 Documents types of RFQ:
 AN – For standard items
 AB – For service items

3.3 Outline Agreement – Contract

3.3.1 TCodes of Outline agreement-Contract








ME31K
ME32K
ME33K
ME35K
ME31L
ME32L
ME33L

Create Contract
Change Contract
Display Contract
Release Contract
Create Scheduling Agreement
Change Scheduling Agreement
Display Scheduling Agreement

3.3.2 Types of Outline Agreement

 Contract
 Scheduling Agreement

3.3.3 Types of Contract

 Quality Contract – MK
 Value Contract – WK
 Distributed or centrally agreed Contract- DC

3.3.4 Types of Scheduling Agreement

 LP – Standard scheduling Agreement
 LPA – Scheduling agreement with release
 LT – Stock transport scheduling agreement

3.3.5 Different Ways to create Contract

Manually
RFQ

Contract
Reference Contract
Purchase Requisition

3.3.6 Item Category:






Standard
Consignment
Subcontracting
Material Unknown
Material Group

–
–
–
–
–

(Blank)
K
L
M
W

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3.3.6.1 Item Category M (Material Unknown):
 This is used where the material number is unknown at time of contract creation.
 This item category would be used, for example, when the contract is for similar
materials
that have the same price but different material numbers.
 The exact kind of material number is maintained in contract release order (PO).
 Material short text and Material group maintained in contract.

3.3.6.2 Item Category W (Material Group):

 This is used for to specify a target value for all materials in a group.
 It can be used for value contracts only.
 The exact kind of material number and price are maintained in contract release
order
(PO).
 Material short text and Material group maintained in contract.

3.3.7 Contracts v/s Scheduling agreement:

3.3.7.1 Contracts:
 Longer- term contract with subsequent issue of release orders
 Different POs can be released for same contract
 Mainly used for frequent non-predictable requirements e.g. Purchasing office
supplies

3.3.7.2 Scheduling Agreement:

 Longer-term scheduling agreements and delivery schedules
 Mainly used for repetitive/predictable requirements e.g. purchasing spare parts
of a large
fleet
 Can be tightly integrated with MRP

3.4 Purchase Order – ME21N

3.4.1 Purchase Order Tcodes:









ME21N - Create purchase order

ME22N - Change purchase order
ME23N - Display purchase order
ME9F – Purchase order message output
ME29N – Release Purchase order
ME2L – Purchase order list by vendor
MEMASSPO – Mass update of Purchase order
ME59 – PO directly from PR

3.4.2 Different Ways to create PO

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Purchase Requisition
MRP
Referring to old PO

Purchase Order
Outline Agreement
Manually
Sales Order

3.4.3 Different Purchase Order Document types:

In Document type the allowed item category can be configured
 NB – Standard PO
 UB – STO PO
 FO – Frame work

3.4.4 Document Type controls:







Allowed Item Category

Number Assignment (Internal or External)
Number Range
Field selection Key (Hidden, Optional, Display & Mandatory)
Allowed Follow-on Documents

3.4.5 Price Flows in PO:

A. It takes price from info record (OR)
B. It takes price from last PO (OR)
C. Manual price entry is required in PO

3.4.6 Types of Procurement:

A. Direct Material Procurement
B. Indirect Material Procurement (A/c Category ref used for indirect Material)

3.4.7 Item Category:

 Item category to determine what can be procured and how procurement can be
carried out. It
determines the type of procurement process and is defined in the procurement
documents.
 Item Category cannot be defined in configuration
Standard
Consignment
Subcontracting
Third Party
Text
Stock Transfer
Service

–
–
–
–
–
–
–

(Blank)
K
L
S
T
U
D

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Limit

The item category controls the

 Material Number
 Material subjected to inventory management
 Account Assignment,
 Good Receipt
 Invoice Receipt

3.4.8 Account Assignment Category:

The account assignment category is used to determine the following:
A. The type of account assignment,
B. The accounts that will be charged when you post the invoice or goods receipt,
C. The account assignment data that you should provide.
D. Account assignment category can be configured as we like
Asset
–
A
Cost Center
–
K
Project
–
P
Order
–
F
Sales Order
–
C

3.4.9 Importance of GR-Bsd IV Flag in PO

In transaction ME21N, invoice tab, it will enforce the system to follow a below
process:
Purchase order  Goods Receipt (GR)  Invoice receipt (IV)
ME21N
MIGO
MIRO
Note:
 Means there is no invoice before Goods Receipt.
 Invoice relates not to the purchase order, but to individual deliveries. That is
to say, the
reference document for the invoice is not the PO but the delivery note or the goods
receipt document.

3.4.10 Delivery completed indicator:

 It has been specified that the “Delivery Completed” indicator is to be set
automatically for the
plant in question in customizing for inventory management.
 The "delivery completed" indicator specifies whether a purchase order item is
considered as
closed. This means that no more goods receipts are expected for this item. If the
"delivery
 Completed" indicator is set, the open purchase order quantity becomes zero, even
if the full
Quantity has not been delivered. It is still possible to post goods receipts of
remaining quantities.

3.4.11 PO Without material Master Record:

 Instead of Material code enter short text
 Enter Material Group
 Account assignment category

3.4.12 GR-Non Valuated Indicator

If this indicator is ticked in the Purchase Order, then no financial posting is
made at the time of
posting a Goods Receipt. The only posting would occur on Invoice Receipt.

3.4.13 Confirmation control Key in PO

The confirmation functionality is used to get better visibility & control over the
goods receipts.
Due to this requirement, when you work with confirmations, the system will not
propose any

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quantity for MIGO unless any confirmations are entered in the PO. Also, MIGO will
propose
only such quantity for which the confirmation is entered.

3.4.14 Delivery Schedule in PO

The vendor acknowledgement duly arrives. However the date in acknowledgement
differs from
that in the PO. And if vendor agrees to deliver the goods in two dates then we can
enter these
confirmation dates in delivery schedule tab in PO

3.4.15 Blanket/Frame Work PO

The FO document type provided by sap is used to create blanket POs. This document
type
enables you to enter a validity period at the PO header level. And use item
category B (Limit
item) for POs.
 No Goods Receipt in Frame work PO
 Material master record aren’t required to create Frame work PO
 Blanket PO are valid for the long term (There you don’t need to create them every
time).
A. Create PR – ME51N
 Document Type – FO (Frame work PO)
 Item Category – B (Limit)
 A/c category ref – K (Cost center)
B. Create PO – ME21N (Referring to above PR)
C. Post the invoice – MIRO

3.4.16 Invoicing Plan in PO

The invoicing plan is a facility that allows you to schedule desired invoicing
dates for planned
procurements independently of the receipt of the relevant goods or services. It
lists the dates on which you
wish to create and then pay the invoices in question.
You do not wait each time for the vendor to submit an invoice for goods supplied or
services
performed, but can have invoices created automatically by the system on the basis
of the data available in
the purchase order and then release them for payment to the vendor.
3.4.16.1

Two types of invoicing plan:

A. Periodic Invoicing Plan

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The periodic invoicing plan can be used for regularly recurring procurement
transactions (e.g. rental, leasing, or subscriptions).
B. Partial Invoicing Plan
The partial invoicing plan can be used for the invoicing of high-cost material
or projects involving the procurement of external services that are to be
subject to stage payments (such as plant construction projects, or the invoicing
of individual stages of a building project following completion in each case).
3.4.16.2

Pre Requisites:
ERS must be selected in the vendor master record.
Tax code and Terms of payment must in PO
 IR indicator and ERS Indicator must be set in PO.
 Account assignment is must.
 SAP recommends the Frame work order type (FO document type) in PO.



3.4.16.3

Procedure:
A. Create a purchase order with the order type FO – Tcode ME21N
 Document Type – FO
 Enter Validity start date and Validity end date (Header – Additional data) in
PO
 Enter Account assignment Category
 Don’t set GR-based invoice verification in PO. IR must be set, and you must
set Evaluated receipt settlement
 Enter Invoicing plan (Item Details – Invoice Tab – Invoicing Plan) by
selecting one invoicing plan type (Periodic Invoicing Plan or Partial
Invoicing Plan).
B. The automatic settlement happens using transaction MRIS

3.4.17 PO Tables:








EKKO – Purchasing Document Header

EKPO – Purchasing Document Item
EKBE – History per Purchasing Document
EKET – Delivery Schedules
EKKN – Account assignment in Purchase document
EKBZ – History per Purchasing Document Delivery cost
EKPV – Shipping specific data of Purchase order

3.4.18 Accounting Entries in Simple PO:

A. Goods Receipt:
Stock A/C debited
=
GR IR Clearing A/C credited
B. Invoice Receipt:
Vendor A/C credited
GR IR Clearing A/C debited
BSX (+)
=
WRX (-)

WRX (+)

3.4.19 Version Management:

 We can control and manage purchasing document changes via SAP‘s version
management functionality, Which can be activated for both internal (PR) and
external
purchasing documents (PO).
 If version management is active then system creates first version as “0” and
second
version as “1” and so on.
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 Version management is activated for the combination of document category and
document type.
 We can see version in PO Header in PO
 Customization -> Img – Material Management – Purchasing – Version Management
3.4.20 Parameters EFB & EVO
EFB = Conditions in an outline purchase agreement are displayed to a user.
EFB = A user may create a PO without reference to a preceding document
EVO = Planned delivery time is checked against the delivery date during the source
determination process.
EVO = Influence the default values for the info update indicator in purchase order
& quotations
EVO = Price from the last purchase order appears as the default value when a new PO
is created.

3.5 Creation of Purchase Order Automatically

3.5.1 Creation of Purchase Order Automatically
A. Create Purchase Order Automatically in Purchasing
B. Create Purchase Order Automatically in Inventory Management
3.5.1.1

Create Purchase Order Automatically in Purchasing

A. Prerequisites:




Activate Auto PO in Material Master (Material Master – Purchasing View)

Activate Auto PO in vendor Master (Vendor Master – Purchasing View)
Create info Record for Material and Vendor combination with price
Maintain Source List with fixed vendor and MRP field.

B. Process:


3.5.1.2

Run MRP with Tcode MD02 and Generate PR or Create PR Manually with
Tcode ME51N
Then Generate Automatic Purchase order with above generated PR through
Tcode ME59N

Create Purchase Order Automatically in Inventory Management

A. Prerequisites:





Define Standard Purchase Organization

Assign plant to Standard Purchase Organization
Maintain purchasing information record with price
Maintain the Auto PO indicator for movement types 101 & 161
Maintain Purchase Group and Material group for material in Material Master

B. Process:Receive Goods directly without purchase order through Tcode – MB01

3.6 Release Strategy

3.6.1 Different Types of Release Procedure
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A. Release procedure without classification.
In the procedure without classification, we can set the release based on the
following four criteria.
 Plant
 Value
 Material Group
 Account assignment category.

B. Release procedure with classification.

Release procedure without classification.

Release procedure with classification.

1. Without classification allows us to

release the document at item level as
well as header level.

1. With classification allows us to release

the document only at header level

2. Only PR Can be released (Both in item

and header level)

2. All documents – PR, PO, RFQ &

Outline agreement only at header
level.

3. Requisitions without classification can

have Account Assignment category,
Material Group, Plant and Total Value
only as characteristics,

3. Where as in with classification you

can define your own characteristics
with CEBAN, CEKKO Etc…

3.6.2 Configuration of release strategy needs these following components:

1.
2.
3.
4.
5.
6.

Characteristics
Class
Release group
Release Code
Release indicator
Release Strategy.

3.6.2.1

Characteristics:
 Creating Characteristics of each attribute of Selection criterion
 Table name CEKKO – used for PO Release strategy
 Table name CEBAN – used for PR Release strategy
3.6.2.2

Class:
 Create Class & link to characteristic
 Class Type must be – 032

3.6.2.3

Configure Release Group:

Create Release Groups & link to class

3.6.2.4

Configure Release Codes:

Create all the release code and assign to Release Group

3.6.2.5

Configure Release Indicator

The release indicator specifies whether the purchasing document can be processed or
is
blocked
3.6.2.6

Configure Release Strategies

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3.6.3 Tcodes:






3.7

ME29N – PO Release
ME54N – PR Release
ME84 - Release Scheduling Agreement (if Document type is LPA)
ME35K - Release Contract
ME45 - Release RFQ
CL20N – Create Characteristics in release strategy

PLANNING PROCESS (MRP & CBP)

3.7.1

PLANNING PROCESS

MRP (Material requirement planning)

 MRP TYPE – PD
 Planning is done as per current demand like
sales order
 MRP does not consider any forecast
information or historical data
 MRP is done only for absolute
requirements/demands on hand

Reorder Point Planning

Once stocks falls below the
reorder point then system will
trigger the procurement proposal
A. Manual Reorder Point
Planning
B. Automatic Reorder Point
Planning

Forecast-Based Planning








It takes historical consumption data

and plans the future demand for given
interval of future periods
MRP Type – VV (Forecast based
planning)
LOT Size – “Y9” Single PR for entire
quantity means & “EX” multiple
separate PR’s for all forecasted
quantity.
Period Indicator – “M” for monthly
“W” weekly basis forecast
Forecast Model – “D” Constant
forecast model
Give forecast details like History
Periods (12 Months), Period per
season (12 Months).

Manual Reorder Point Planning







Consumption based planning

CBP uses past consumption data (Historical data) to
calculate future requirements with the help of the
material forecast or statistical planning procedures
 Reorder Point Planning
A. Manual Reorder Point Planning
B. Automatic Reorder Point Planning
 Forecast-Based Planning
 Time-Phased Planning

Time-Phased Planning
MRP TYPE – R1
Planning Cycle – CL1
Planned Delivery – 5 Days
TPP Can be carried out in 2
ways
A. MRP
B. CBP
 If a vendor always delivers a
material on a particular day of
the week (Depends on
Planning Cycle), it makes
sense to plan this material
according to the same cycle, in
which it is delivered.





Automatic Reorder Point planning

Manual Reorder Point planning both the reorder

 Automatic Reorder Point planning both the reorder
level and the safety stock level manually maintained
level and the safety stock level are determined by
in material master
the integrated forecasting program
MRP Type – VB (Manual reorder point planning)
 MRP Type – VM (Automatic reorder point
Lot Size – HB (Replenish to maximum stock level)
planning)
MD03 – In MRP run new PR gets generated if stock
 MD03 – In MRP run new PR gets generated if
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available falls below the reorder point
stock available falls below the reorder point
MD03 – In MRP run newly created PR quantity is
 MD03 – In MRP run newly created PR quantity is
equal to = Maximum stock level mentioned in
equal to = Maximum stock level mentioned in
material master – Available stock in warehouse as
material master – Available stock in warehouse as
per MD04
per MD04.
Material Management

The main function of material requirements planning is to guarantee material

availability, that is,
it is used to procure or produce the requirement quantities on time both for
internal purposes and
for sales and distribution.
3.7.2

MRP Controller:The MRP controller is responsible for all activities related to

specifying the type, quantity,
and time of the requirements, in addition to calculating when and for what quantity
an order
proposal has to be created to cover these requirements.

3.7.3

MRP Type:The MRP type is a key that controls the MRP procedure to be used for
planning a material.
The MRP type belongs to the plant-specific data.
Example: ND - No planning & PD – Planning

3.7.4

Difference between MRP & CBP

3.7.4.1

Material requirement planning: is carried out using current and future sales
figures. The planned and the exact requirements
quantities trigger the net requirements calculation.

3.7.4.2

Consumption Based planning: uses past consumption data (historical data) to

calculate future requirements with the help of
the material forecast or statistical planning procedures. The net requirements
calculation is
not hereby triggered by an independent or dependent requirement, but is triggered
either
when stock levels fall below a reorder point or by forecast requirements.

3.7.5 MRP (Material requirement planning – MRP Type is PD

 The planning is carried out for the quantities planned through planned
independent
requirement or quantities planned through incoming sales orders (made-to-order or
made-tostock). The planning is done with respect to the master plan.
 The planning process does not consider any forecast information or historical
consumption
patterns. Material planning is done only for absolute requirements/demands on hand
In Material Master – MRP 1 View – MRP Type as PD and save the Material

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Now see the status of Material CLS3690-100EA in MD04 Tcode

As per above
In hand stock is = 0
As per material master safety stock is = 2
From 4 sales order required quantity is = 1+2+1+5 = 9
As per above screen demand is = 11
Now run the MRP – MD03

Now it will generate 2 PR’s 19860067 & 19860068 for total quantity of 11 EA

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(In MRP Scenario it will consider only demand order for MRP Run)
3.7.6 Consumption Based Planning (MRP Procedures Supported in CBP): Reorder Point
Planning
A. Manual Reorder Point Planning – MRP Type VB
B. Automatic Reorder Point Planning – MRP Type VM
 Forecast-Based Planning – MRP Type VV
 Time-phased planning
3.7.7

Reorder Point Planning

In RPP once stocks falls below the reorder point then system will trigger the
procurement
proposal. There are two types of reorder point planning.
A. Manual Reorder Point Planning: In manual reorder point planning both the reorder
level and the safety stock level manually maintained in material master.
B. Automatic Reorder Point Planning: In automatic reorder point planning, both the
reorder level and the safety stock level are determined by the integrated
forecasting
program.

3.7.8

Manual Reorder Point Planning – MRP TYPE VB

In Material Master MRP View 1, enter the data as below
 MRP Type = VB (Manual reorder point planning)
(MRP Type - Key that determines whether and how the material is planned. You
have the following options)
 Reorder point = 100
(Reorder point - If the stock falls below this quantity, the system flags the
material
for requirements planning by creating a planning file entry.)
 Lot Size = HB (Replenish to maximum stock level)
(Lot Size - Key that determines which lot-sizing procedure the system uses within
materials planning to calculate the quantity to be procured or produced.)
 Maximum stock level = 200
(Maximum stock level - Quantity of the material in this plant that may not be
exceeded.).
 In MD03 new PR gets created if Stock available falls below the Reorder point.
 In MD03 newly created PR will have quantity equal to = Maximum stock level in
Material master – Available stock in warehouse as per MDO4 Tcode
 Newly generated PR will have fixed vendor as per the source list

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Save the Material

Now run the Stock requirement – MD04
Material in stock is = 13 EA
As per material master safety stock is = 20 EA

Now we will run the MRP – MD03

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It is generating new PR 19860062 with 187 Quantity and fixed vendor 1120037847 as
per source list (Quantity in New PR 187 = Maximum stock level in Material master
“200” – Available stock in warehouse as per MDO4 Tcode)
Save
MRP carried out for CLS9018-100EA for CN01 Plant
Now check MD04 again

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Also we will check the source list ME03

Vendor 1120037847 is fixed and made MRP relevant for material CLS9018-100EA.
3.7.9 Automatic Reorder Point Planning – MRP Type VM
 In the case of Automatic Reorder Point Planning (MRP Type VM) - a type of
consumption
based planning, the system calculates the recorder point and the safety stock using
the past
historical consumption data to derive the future consumption patterns. In this case
you would
need to extend the material master for the forecast view with a valid forecasting
method
selected.
 In the net requirement calculations, the available stock is determined as equal
to the plant
stock and the firmed receipts from purchase and production. Net requirement
calculations do
not consider the demand from sales order or from planned independent requirements
or from
material reservations. If the available stocks fall below the reorder point,
procurement
proposals are raised.
3.7.10 Forecast Based Planning – MRP Type VV
This document briefs the usage of Forecast based planning with yearly lot size and
generating
single purchase requisition for forecasted requirements against the consumption for
year.
 Create a lot Size (OMI4)
Lot Size – Y9 (This will create single PR for all forecast quantity)

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 Change Material Master

 Lot Size = Y9
 MRP TYPE = VV

MRP 3 View – Period indicator = M

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Forecasting View: Forecast Model D, Period Indicator M, History Periods 12, Period
per
Season 12, Initialization X, Model Selection A, Optimization Level F

3.7.10.1 Process Steps

a.
b.
c.
d.

Maintain consumption values (MM02)

Execute Forecast ( MP30)
Stock Requirement List (MD04)
Run MRP (MD03)

3.7.10.2 Process Details

3.7.10.2.1 Maintain consumption values (MM02)

Update the consumption of material in MM02 of Additional data – Consumption tab

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3.7.10.2.2

Execute Forecast ( MP30)

Enter the material number and plant. Then press enter. System will display the
below
Execute Forecast screen.

Click on PAST Button to see the consumption History as displayed below

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Go back and click on Execute

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SAVE
3.7.10.2.3

Stock Requirement List (MD04)

MD04 Screen before running forecast module

MD04 Screen after running forecast module (Where requirement is 59 quantity as

per above forecast module per month)

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3.7.10.2.4








Run MRP (MD03)

Now it creating single PR 19860069 of quantity 547
It has planned for 10 Months from 01.01.2018 (Because material available till
December)
So required quantity is 59*10 = 590
Already available quantity is = 43
Final required quantity = 590 – 43 = 547
As per Forecast based planning it will create one single PR for all 547 quantities
when we run MD03 And this is because we have selected LOT SIZE as Y9

SAVE

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Note: - If we select LOT SIZE as “EX” (Lot-for-Lot order quantity) in MRP 1 View of
material master, then it will create multiple separate PR’s for all forecasted
quantity
Example if monthly forecast quantity is 59 then system will create individual PR
for all
forecasted months.

3.7.11 Time-phased planning

If a vendor always delivers a material on a particular day of the week, it makes
sense to plan
this material according to the same cycle, in which it is delivered.
Time-phased planning can be executed using consumption-based planning or MRP:
A. If you want to carry out time-phased planning using consumption-based
planning techniques, the requirements have to be created using the material
forecast. If
you use consumption-based planning, only the forecast requirements are included in
the
net requirements calculation. For reducing the forecast requirements, you can
choose the
same settings in Customizing as used for forecast-based planning.
B. If you want to carry out time-phased planning using MRP, all the requirements
that are
relevant to MRP are included in the net requirements calculation. For this purpose,
the
indicator Time-phased with requirements must have been selected in the MRP type.
The
forecast requirements can also be taken into account in this process.

Note: Material Planning can generate automatically two documents

A. Purchase requestions
B. Planned orders
 Material Forecast Based Planning Type
A. Automatic reorder point planning
B. Forecast based planning
C. Time phased planning
 To generate purchase requisitions with the consignment item category in material
requirements
planning (MRP). We have to Select Consignment as the special procurement type in
the material
master record (MRP 2 View).

If you generate MRP for this Material then PR will be created with item category
“K”

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4

Inventory Management and Physical Inventory (MM-IM)

4.1 Effects Of Goods Movement:

PO Status Updated &

PO History generated

GR SLIP
(Hard Copy)

WM – Transfer request
to Warehouse
Management (If Active)

Material
Delivery

Goods
Receipt

Stock &
Consumption A/C
Updated

In Material Master
stock and Value
updated

Material
Doc got
generated

Accounting
Doc got
generated

QM- Creation of an
inspection lot to trigger
a quality inspection

4.2 Stock Types:

A. Un Restricted stock
B. Blocked Stock
C. Quality Inspection stock

4.3 Important Tcodes in Inventory:
















MIGO – Goods Receipt

MB1A – Goods issue
MB1B – Transfer posting
MB1C – Goods Receipt for without PO (Mvt type 501)
MB01 – Post goods receipt for PO (Automatic creation of PO)
MMBE – Stock overview
MB5B – To see details of posting
MB03 – Material doc
MR51 – Accounting doc
MBST – Cancellation of Material document
OMJJ – To create new Movement type
VL31N – Inbound Delivery Creation
VL10B/VL01N – Outbound Delivery Creation
MI07 – Process list of Inventory differences

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4.4 Goods Receipt when PO is unknown
If we wish to enter a goods receipt with reference to a purchase order but do not
know the
PO number. Then follow below steps:
 Select Goods Receipt - PO Number Unknown

 Find Purchase Order

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Then select appropriate Purchase order for Goods receipt.

4.5 Settings required in system to send Goods Receipt message to buyer






Message determination for inventory management must have been maintained.

A condition record must exist.
A mail text must have been maintained.
“GR Message” indicator must have been set in the PO header delivery/Invoice tab.

4.6 Transfer Posting – MB1B

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4.7 Stock Transfer (Without STO) – MB1B:

A. Storage location to storage location in one step

B. Storage location to storage location in two steps

C. Plant to Plant in one step

D. Plant to Plant in two steps

4.8 Stock transfer relevant for Valuation



Stock transfer from consignment stores of consignment vendor to our unrestricted-

use
stock in storage location.
 Stock transfer of a material from plant 0001 to plant 0002. The plants belong to
the same
company, however the valuation areas are different (valuation level is plant).

4.9 Difference between Transfer posting and Stock Transfer:

 Stock Transfer: There will be physical goods movement
 This can be used by using one step or two steps and stock transfer can be
possible by
using STO Process
 Transfer Posting: Physical movement may or may not occur

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

4.10

Also only change in stock type, Batch type or Material Number.

Tables of Inventory Management

 MSEG – Material Document
 RSEG – Accounting Document
 ISEG – Physical Inventory document

4.11

GR Blocked Stock
Conditionally accepted deliveries for a purchase order are recorded in goods
receipt blocked stock (GR blocked stock). The quantity posted into goods
receipt blocked stock is not added to the inventory or managed as part of the
inventory. And Movement type is 103.
Effects of GR Block stock
 Accounting documents are not generated at the time of GR because
inventory is non-valuated.
 GR Blocked stocks are shown in the stock overview of Plant level and
not in Storage location level.
 The quantity booked under GR Blocked stock is recorded in the PO
History (PO History updated with zero quantity).

 Once you make the GR into GR Blocked stock, PO history updated but PO Status
won’t update

 The Quantity booked into GR Blocked stock is not yet available for MRP (PO
4400081396 still
showing open in MRP)

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4.12

Difference between GR Blocked stock and Blocked stock:

 Blocked Stock: Materials are rejected by quality or in production & Goods are
valuated.
 GR Blocked Stock: Goods accepted under conditional acceptance &Goods are
not valuated.

4.13

Inbound and Outbound Delivery:

4.13.1 Inbound Delivery – VL31N:We specify some dates in our PO for delivering
material and we will create an
inbound delivery with respect to the PO released on that vendor stating that the
delivery will be exactly on so and so date. This makes we to have the exact
delivery
schedule or otherwise it is a pre intimation for vendor by when he could supply the
material.
4.13.2 Outbound Delivery – VL01N/VL10B:We use this process in order to support all
shipping activities like picking, packing,
transport and goods issue. All information regarding shipping planning is stored in
outbound delivery,

4.14





4.15

Document Types of inventory Management:

WA – Goods issue, Transfer postings,
WE – Goods receipt with reference to PO
WI – Inventory difference
WL – Goods issue with reference to delivery (SD)

Important Movement Types in MM:

A. 101 – Goods Receipt against PO

102 – Reversal of 101
B. 103 – Goods Receipt against PO into GR Blocked stock
104 – Reversal of 103
C. 105 – Release GR Blocked stock to Warehouse
106 – Reversal of 105
D. 121 – Subsequent adjustment for Subcontracting
E. 122 – Return delivery to vendor (Without PO)
123 – Reversal of 122
F. 161 – Returns for PO (With PO)
G. 124 – Return delivery to vendor from GR blocked stock
H. 201K – Goods receipt for cost center
I. 301 – Transfer posting plant to plant in one step
303 – Transfer posting plant to plant in two steps (Remove from storage)
305 – Transfer posting plant to plant in two steps (Place in storage)
J. 309 – Transfer posting Material to Material
K. 311 – Transfer posting Storage Location to Storage Location in one step
313 – Transfer posting Storage location to Storage Location in two steps (Remove
from storage)
315 – Transfer posting Storage location to Storage Location in two steps (Place in
storage)
L. 321 – Transfer posting Quality inspection to Unrestricted stock

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M.
N.
O.

P.

Q.

R.

S.

4.16

322 – Transfer posting unrestricted stock to quality inspection

343 – Transfer posting Blocked stock to unrestricted stock
344 – Transfer posting unrestricted stock to Block stock
349 – Transfer posting Blocked stock to Quality inspection
350 – Transfer posting Quality inspection to Blocked stock
351 – Goods issue for a stock transport order (without Shipping)
411 – Transfer posting of special stocks to company's own stock
501 – Goods Receipt without PO to Un restricted
503 – Goods Receipt without PO to Quality Inspection
505 – Goods Receipt without PO to Blocked Stock
541 – Goods issue to subcontracting vendor
543 – Sub items receive from subcontract vendor
545 – Goods Receipt of By-Product from subcontracting vendor
551 – Withdrawal for scrapping from unrestricted stock
553 – Withdrawal for scrapping from quality inspection stock
555 – Withdrawal for scrapping from blocked stock
561 – Receipt per initial entry of stock balance into unrestricted stock
563 – Receipt per initial entry of stock balance into quality inspection stock
565 – Receipt per initial entry of stock balance into blocked stock
641 – Goods issue for a stock transport order (With Shipping)

Stock types considered in Physical Inventory procedure

A. Unrestricted use stock

B. Block Stock
C. Quality inspection stock
D. Vendor Consignment stock
E. Materials provided to Subcontract Vendor
Note: Stocks which are In-Transit & GR Blocked stock are not considered for
physical
inventory procedure..

4.17
A.
B.
C.
D.

4.18

Physical Inventory procedure carried levels

Material Level
Plant Level
Storage location level
Stock type

Negative Stock

If you are issuing material even though there is no stock with you that is the
negative stock for that storage location. Negative stocks are required if, for
example,
goods issues are entered before the corresponding goods receipts for organizational
reasons and the material is already physically located in the warehouse.
Once the goods receipts have been posted, the book inventory balance must
correspond to the physical stock, that is, the book inventory balance must no
longer be
negative.

4.19

Prerequisites

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A. Customizing system for each valuation area and storage location (SPRO –IMG-
MMinventory management and physical inventory-goods issue / transfer posting -allow
negative stocks) – Tcode OMJ1
B. We have to activate the admissibility of negative stocks for a material in the
material
master data. (In storage location 2 View)

4.20

Example of Negative Stock

 1000 pieces of a material are delivered. Due to insufficient time, the goods
receipt is
not yet entered in the system.
 Physical stock: + 1000 pieces
 Book inventory balance: 0 pieces
 The material is needed urgently, and 100 pieces are withdrawn from the warehouse.
The goods issue is entered in the system straightaway.
 Physical stock: + 900 pieces
 Book inventory balance: - 100 pieces
 The goods receipt of 1000 pieces is posted at the end of the day.
 Physical stock: + 900 pieces
 Book inventory balance: + 900 pieces

4.21





4.22

Stocks
MC46 - Display the slow moving stock materials,
MB51 - Display the goods movements for specified materials,
MB52 - Displays stocks at plant and storage location level,
MC49 –displays the mean stock value.

Goods Withdrawal

Goods withdrawal to following account assignment object can be possible in the

system.
 Cost Center
 Production order
 Asset
 Sales order

Subcontracting
5.1

Process of Subcontract in MM
Create the finished goods material code – MM01
Maintain the BOM for the finished Material – CS01
Create Standard PO with item category as "L" – ME21N
Issue material to vendor with movement type 541 – ME2O
Receive the material against the PO with movement type 101 – MIGO(Sub items comes
with
Mvt type 543 and by product as 545)
F. MIRO to account for vendor's invoice for the service charge& material used by
him.
A.
B.
C.
D.
E.

5.2

Pre-Request:

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A. Create Subcontracting PIR for subcontractor with Finished Material code. Main
subcontractor
service charge in PIR.

5.3 Master Data Setting:

A. Material Master (MM01)
Maintain special procurement key for subcontracting in MRP 2 view.

B. Bill of Material (CS01)

If a material needs to be returned by the vendor after the subcontracting process
is complete, it
should be entered as a negative quantity in the Bill of Material (BOM).

5.4 Accounting Entries in Subcontracting PO:

Good Receipt (MIGO):a. Raw Material:Raw Material consumption A/c
Inventory A/c

=
=

b. Finished Product:Inventory A/c

GR/IR Clearing A/c
=
Vendor A/c or External Service
Change in stock A/c
=

=
+ BSX (Debited)
- WRX (Credited)
=
+ FRL (Debited)
- BSV (Credited)

+ GBB/VBO (Debited)
- BSX (Credited)

Note: In case of goods receipt of subcontracting purchase order. The transaction

event key FRL
or FRN is hitted as sap standard process.
 FRL - External activity.
 FRN - Incidental costs of external activities.
 If the purchase account management is active, and if is GR or IR for the
subcontract
order are concerned, Then system uses posting keys FRL or FRN and BSV instead of
posting keys EIN and EKG.

5.5 Different Scenarios

5.5.1 Scenario: 1
Providing R/W Materials to subcontracting vendor From Another Vendor:
Material A
Material B
Vendor X
Vendor Y

Finished Material
R/w Material to created material A
Subcontractor
Vendor to supply R/w Material B

 Here we have to create 2 PO’s, one as Subcontracting for Material “A” and other
as Standard PO for Material “B”.
 1stSubcontracting PO – Create Subcontracting PO to Subcontract vendor “X” for
Finished Material “A”.
 2nd Standard PO – Create Standard PO to vendor “Y” for R/w Material “B”.
 In item Details - Delivery address TAB enter subcontract vendor address
as delivery address.
 Ticks mark the Check box the SC vendor beside this field.

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 Now inform the vendor Y to send the components B to subcontractor X.
 When Subcontract vendor “X” will confirm you that the components are (material B)
arrived at his place take the GRN for purchase order no 2.
 This will directly Transfer the stock of material (B) provided to Subcontract
vendor
“X” instead of your company/storage location.
 You are liable to pay for vendor “Y” as now the stock is in our Subcontractor
place.
 Do normal MIRO for vendor “Y” for Payment.
 Receive the Material “A” against the Subcontracting PO with movement type 101 –
MIGO(Sub items comes with Mvt type 543 and by product as 545)

5.5.2

Scenario: 2
Subsequent Adjustment In Process Of Subcontracting – MB04 (Mvt 121):

 After the subcontractor (as vendor) had delivered the ordered material (end
product), you
posted the goods receipt to the subcontract order. The system determined the
necessary
components for each purchase order item and created for each component a goods
issue
item with the quantity that was determined in the purchase order.
 If the vendor informs you after these postings that greater or smaller quantity
of the
subcontracting components was actually consumed than planned in the purchase order,
You must post a subsequent adjustment to correct the goods issue posting with Mvt
121
 In Tcode MB04 Fill in the Purchase Order Number and hit enter
 Tick the checkbox of the components you want to adjust and click the Adopt
button or press F5
 Enter the quantity difference. If more of the components were consumed, enter a
positive Amount; if fewer were consumed enter a negative amount. Finally, post
the document.
 After saving, the value of the goods receipt is recalculated to include the
subsequent quantity.

5.5.3

Scenario: 3
By-Products in Subcontracting:

 In the subcontracting PO we give the BOM in which components issued are given +ve
indicator and byproducts &scraps as –ve.
 After finished products are ready at subcontractor, we receive goods with MIGO
101
movement type where components are consumed with 543, by-products are created with
544 and scrap with 545.
 We return the materials to our stock with 542.
 If quantity of scrap is known, we give the percentage of it in BOM. If it is
known later,
we can move to scrap with 545 and return with 542. We can also use movement type
551
directly to scrapping.

6
Consignment
In consignment processing, the vendor provides materials and stores them on our
premises. The
vendor remains the legal owner of the material until you withdraw materials from
the consignment
stores.
 Consignment stocks of the same material from different vendors can be managed
independently from one another and at the price of the individual vendors.
 Consignment stocks are not valuated. When the material is withdrawn it is
valuated at the
price of the respective vendor.
 A consignment material can be allocated to one of three stock types:

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 Unrestricted-use stock
 Quality inspection stock
 Blocked stock
You can make transfer postings between these three stock types. Withdrawals can
only be
posted from unrestricted stock, however.

6.1 Consignment Process:

A. Create Consignment info record in Tcode ME11. (Prices need to be maintained in
info record
which will be used when settling liabilities with vendor)
B. Create the Purchase Order with item category K in ME21N to order the goods from
vendor for
consignment.
C. DO the GRN with MVT 101K in Tcode MIGO.
These goods will not be valuated; accounting document will not be posted unless
stock is
withdrawn from consignment stock to our own use.
D. Transfer consignment stock to your own stock in MVT 411K in Tcode MB1B
This will be valuated and will post accounting document. Now consignment stock is
actually
valuated.
E. Do the Vendor Settlement in Tcode MRKO.
F. If goods are not withdrawn, you can do 102 (MIGO) or 122 (MB01) with special
stock indicator
K for consignment to return goods to vendor.
G. Stock in consignment is seen separately in stock overview MMBE for certain
material and plant.

6.2 Accounting Entries for Consignment:

Good issue to cost centre-Mvt-201K:Raw Material consumption A/c
=
A/c Payable consumption
=

+ GBB/VBR (Debited)
- KON (Credited)

Transfer good to own stock from Vendor-Mvt-411K:Inventory A/c

=
+ BSX (Debited)
A/c Payable consumption
=
- KON (Credited)
For both Mvt-201K/411K invoice is –MRKO:A/c Payable consumption
=
+ KON (Debited)
Vendor A/c
=
- Credited
6.3 Automatic generation of Consignment Purchase requisition
 To generate purchase requisitions with the consignment item category in material
requirements
planning (MRP). We have to Select Consignment as the special procurement type in
the material
master record (MRP 2 View). If you generate MRP for this Material then PR will be
created with
item category “K”
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 “OR” we can also generate Consignment purchase requisition in MRP by determining

vendor as
consignment in Quota arrangement.

Stock Transfer & Stock Transport Order

7.1 Types of Stock Transfer – MB1B (Without STO):A. Stock Transfer between Plants
in One Step (Mvt 301)
B. Stock Transfer between Plants in Two Steps (Mvt 303& 305)
7.2 Stock Transfer between Plants in One Step (Mvt 301 – Tcode MB1B)
301 removes items from one plant's stock, immediately updates the other plant's
stock,
and makes the items available.
7.3 Stock Transfer between Plants in Two Steps (Mvt 303 & 305 – Tcode MB1B)
303 will remove the stock and put it into "stock in transit." The receiving plant
has to do
a 305 when the stock arrives to make it available for use.
7.4 Types of Stock Transfer Order:A. Stock Transport Order without Delivery (Same
Company code)

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B. Stock Transport Order with Delivery via Shipping (Different Company code/Inter
Company code STO via the SD Component)
C. Stock Transport Order with Delivery and Billing Document/Invoice (Different
Company
code/Inter Company code STO via the SD Component)
7.4.1





7.4.2











Stock Transport Order with Delivery via Shipping (Different Company

code/Inter Company code STO via the SD Component)

Create of stock transport order (STO) at receiving plant (ME21N)

 Document Type – UB (STO PO)
 Enter Delivery cost in PO
 Item category – “U”
Creation of Replenishment order (Outbound delivery) at Supplying plant with
reference to
the STO PO (VL10B)
Ship the Goods (Picking) with Replenishment delivery (Outbound Delivery)and do
Goods
issue at supplying plant with Mvt 641(T code VL02N)
 System creates Accounting document at the time of Goods issue
 If you use the two-step procedure, use movement type 641.
 If you use the one-step procedure (movement type 647), no goods receipt needs to
be
posted when the goods arrive in the receiving plant
Goods Receipt at receiving plant (T Code MIGO) for with Replenishment delivery
(Outbound Delivery) with Mvt 101
 System won’t create an accounting document because account postings are already
made at the time of goods issue.

7.4.3


Stock Transport Order without Delivery (Same Company code)

Create of stock transport order (STO) at receiving plant (ME21N)

 Document Type – UB (STO PO)
 Enter Delivery cost in PO
 Item category – “U”
Goods issue with respect to STO PO (MIGO-GI) and use Mvt – 351
 System creates Accounting document at the time of Goods issue
Goods Receipt at receiving plant (MIGO-GR) with respect to STO PO with Mvt 101.
 System won’t create an accounting document because account postings are already
made at the time of goods issue.

Stock Transport Order with Delivery & Billing Document/Invoice (Different

Company code/Inter Company code STO via the SD Component)

Stock transport order in the receiving plant.

Create a stock transport order with order type NB and item category blank
(standard).
Creating Outbound Delivery – VL10B.
Changing Outbound Delivery – VL02N.
To Pick the Material and to do the Post Goods Issue supplying plant will change the
above outbound delivery document.
Creating Billing Document – VF01
After PGI, A billing Document known Commercial Invoice is created to update the
corresponding GL Accounts and same is send to receiving plant (Customer).
Goods Receipt for Stock Transport Order – MIGO
Invoice in the receiving plant – MIRO

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The receiving plant enters the invoice from the supplying company code in logistics
invoice
verification.

7.5

Configuration Steps for STO

A. STO Document Type – UB.
Standard document type used is UB and assign allowed item category U (Stock
transport
order) in UB.
B. Define Shipping Data for Plant.
In this configuration step, customer number is assigned to the plant.
C. Create Checking Rule.
Stock transport orders can do the availability check of the material in the
supplying plant.
D. Assign Delivery Type and Checking Rule.
Deliverytype and checking rule are assigned to the supplying plant and STO document
type.
For STO Document type UB, the delivery type NL is used with checking rule B
For document type NB, Delivery type NLCC is used with checking rule B.
E. Master Data Configuration.
 Customer number assigned to the supplying plant.
 Materials master should be extended to the sales area.
 Shipping point determination needs to be maintained for the issuing plant.
 Issuing Plant should be created as vendor.

Note: - In STO, the accounting entry happens when you perform the goods issue (Mvt
type
351,641).There is no accounting entry passed during MIGO (101)

Third-Party Processing
In third-party processing, you place a purchase order with a vendor to deliver
goods for a third
party (Customer).
This means that your company does not deliver the material. You forward the order
to an external
vendor instead, who then sends the material directly to the customer and invoices
to you.

8.1 Third-Party Processing

 Creation of third party sales order
 When you create a third-party sales order, the system automatically creates a
purchase
requisition.
 Manually create a PO for vendor with item category “S”. Enter either the customer
number or
customer address in delivery address Tab. (Check whether goods receipts can be made
for the
third-party item. Goods receipts are possible if the goods receipt indicator is set
in the item).
 There will be no GR in this case.
 Create an invoice verification document to vendor
 Create an invoice from the SD side w.r.t Sales order.

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9

Automatic Account Determination

9.1 Account Determination Process

From Mvt Type

system will
determine Value
String and
Account Modifier
(Account
Grouping)

Goods Receipt –
MIGO
Mvt Type – 101
Plant - PXXX
Material – MXXX

Mvt
Type
101

Transaction Event Keys

Value String – WE01
TE
Description
Keys
BSX
Inventory
Posting
WRX
GR/IR
Clearing A/c
PRD
Price Diff A/c

Account Grouping
Value Transaction Account
String
Event Key
Modifier
WE01
BSX
…….

From Plant System will

determine Valuation Area and
Valuation Grouping code

From Material
Master System
will determine
Valuation Class
and Price Control

Valuation Grouping
Val Area Val Grp Code
1000
0001
1100
0002

Material Master
Valuation Class: 3000
Price Control: V
MovAvg Price: 50 RS
Account Determination
TE Key
BSX
GBB

Val Grp Code

0001
0001

Account Modifier
……….
VBR

Valuation Class
3000
3000

GL Account
300000
400000

9.2 Assigning Valuation Class to Material Type via Account Category Reference

Define Account
Category Reference
A/c Cat Description
Ref
0001
Raw
Material
0008
SemiFinished

9.2.1

Valuation Class
Valuation Class
A/c Cat Ref
3000
0001
3001
0001
Valuation Class
7900
7901

A/c Cat Ref

0008
0008
Mat Type – Valuation Class
Mat Type
A/c Cat Ref
ROH
0001
HALB
0008

Movement Type:

It is a 3 Digit number which indicates movement of stock/Material.

9.2.2

Value String:

 Value string keys are for SAP internal usage. It is just a pointer to the
transaction
event key which is necessary for automatic account determination.

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 Movement types are linked to transaction keys via valuation string in OMWN Tcode.
 The value string contains all posting transactions that are possible for a
certain
transaction.
 Value string WE01, for the goods receipt for a purchase order into stock,
contains transactions BSX and WRX
 WE01: BSX, WRX, PRD, KDM, EIN, EKG, BSV, FRL, FRN, BSX, UMB.

9.2.3

Transaction Event Key:

You do not have to define these transaction keys, they are determined
automatically from the transaction (invoice verification) or the movement type
(inventory management). All you have to do is assign the relevant G/L account to
each posting transaction.

9.2.4

Account Modifier:

 A/c Modifier is used for the transactions for which SAP says there may be some
business transactions for which we can do posting accordingly for our
requirements.
 Mainly focus on GBB, KON and PRD they are offsetting entry for materials,
consignment and price difference accounts.
 A/C modifier is attached to value string for a particular transaction.

9.2.5

Valuation Group Code:

Valuation grouping code is used to group the valuation area to minimize the
effort In SAP using two types of valuation area

9.2.6

Valuation Area:
It is the entity where we evaluate the material also SAP recommends to use plant
as Valuation Area

9.2.7

Valuation Class:
Valuation class is nothing but group of GL A/c

9.3 List of Transaction Event Keys:













BSV - Change in stock A/c

BSX – Stock A/c
FRE - freight A/c
FRL - External service
FR1 - Freight clearing
GBB - Offsetting entries
 BSA - for initial entry of stock balances
 VBO - for consumption from stock of material provided to vendor
 VBR - for internal goods issues (for example, for cost center)
 ZOB - for goods receipts without purchase orders (Mvt type 501)
KON - Consignment liabilities
PRD - Price differences
VST - Input tax, Purchasing
WRX - GR/IR clearing

9.4 Delivery Cost in PO

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Transaction event keys in delivery cost comes from
 Value String
 Purchasing calculation schema

9.5 Value string WA01 defined for

 Goods issues
 Other goods receipts

10 Pricing Procedure
10.1Pricing Procedure: Price Determination process in a PO

Purchase Order
Vendor: ABC Inc..
Purch Org: 1000
Mat – M001
Plant – 1000
Price – 50.00
UOM - Kg

From the Vendor Master

the system will find the
Vendor Schema group

From the Purchase Org

the system will find the
Purchase Org Schema
group

Condition Table

Schema Determination
Vendor
Purchase Org
Pricing
Schema Group Schema group Procedure
01
01
RM0000
01
02
RM0001

SNO
10
20
30

Schema RM0000
Step
Conditions
01
PB00
01
RA00
01
FRA1

………
………
………
………

Contract Item
Price –
50Transferr
ed to PO

No Record

Condition Type: PB00

Access Sequence: 0002

Plant Info Record

Mat – M001
Plant – 1000
Price – 50.00

Access Sequence: 0002

Condition Tables:

1.
2.
3.
4.

Contract Item
Plant Info Record
Info Record
……..

Exclusion

√
√
√
√

10.2Process Steps
10.2.1 Determine the condition tables.
The system determines the condition tables assigned to the access
sequence and it is nothing but the price element.
a. Determine the condition record (Part I)

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10.2.2


10.2.3

10.2.4

10.2.5

10.2.6


10.2.7

The condition table of access sequence 0002 consists of many condition

records of which contract item has the highest priority. A system search
yields no value for this condition record.
b. Determine the condition record (Part II)
In the previous step, the system search yielded no result for the highest
priority condition record, which is contract item. Therefore, the system
moves to the next condition record, which is Info Record.
Determine the access sequence – 0002.
An access sequence is a search strategy the sap system uses to search for
valid condition records of a certain condition type.
Condition type PB00 – Assigned to access sequence 0002
Determine the condition type – PB00.
The condition types are used to represent pricing elements such as prices,
discounts, surcharges, taxes, or delivery costs in the SAP System. These
are stored in the system in condition records.
Define Calculating Schema – RM0000.
A calculation schema - a framework of steps used to calculate or
determine something - is used among other things to calculate costs,
prices, period-end rebates, and taxes.
Define schema group.
Defining a schema group helps you keep track of this by grouping together
the purchasing organization or vendors that use the same calculation
schemas.
 Define a vendor schema group.
 Define a purchasing organization schema group.
 Assign a purchasing organization schema group to the purchasing
organization.
 Assign a vendor schema group in the vendor master record.
Assignment of Schema Group of Vendor, Schema Group Purchasing
Organization and Calculation Schema.
The calculation schema is assigned for a combination of vendor schema
group and purchasing organization schema group.
The calculation schema is assigned for a combination of a supplying plant
and purchasing organization schema group.
Maintain Condition record(MEK1)

Important Points
 Item conditions are conditions relating to a single item of a document.
 Header conditions are entered in the header of a document and relate to all the
items of that document.
 An access sequence is a search strategy that enables you to specify the order in
which condition tables are to be searched for relevant entries for a condition
type.
 The order of the accesses is determined by the order of the condition tables in
the
access sequence.

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 A condition type must have an access sequence assigned to it if you want to
maintain conditions with their own validity periods (for example, condition type
PB00).
 No access sequence assigned to header conditions, discounts, or surcharges.

11 Logistics Invoice Verification (MM-IV-LIV)

Document from an invoicing party containing the payments to be made based on
business transactions
performed in Purchasing and Inventory Management. An incoming invoice can be an
invoice or a credit
memo.

11.1 Important data for Invoice Verification is:




Master data
Transaction data

11.1.1

Master data
A. Material Data
Material number, material name, units of measure, stock data, over
delivery and under delivery tolerances, reminder keys, price control data,
and prices.
B. Vendor Data
Vendor address, Bank data, the currency of the vendor, Terms of
payment and terms of delivery.
C. Accounting Data
Account name, the account type, the currency in which the account is
managed,

11.1.2

Transaction data
A. Purchasing Document
B. A purchasing document contains information such as the vendor number, the
purchase order date, the terms of delivery, the material number, and the order
quantity.
C. Material Document
D. A material document is created when a goods receipt is posted. It includes
the posting date, the quantity delivered, and perhaps also the delivery note
number and the purchase order number that the goods receipt refers to. It
documents the quantity-based changes.
E. Accounting Document
F. An accounting document is created when a goods receipt (unless the goods
receipt is not valuated) or an invoice is posted. It contains details of the
individual postings with the account number, posting key, and the amount. It
documents the value-based changes.

11.2 Invoice Transaction (MIRO)

11.2.1 Invoice
You have received a vendor invoice. The vendor invoices you for the goods that
you have ordered from that company.

11.2.2 Credit memo

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The vendor has invoiced you too much for the last delivery, for example, less than
the
agreed quantity was delivered and that at the agreed total price, or you have
returned part
of a delivery to the vendor due to quality problems.

11.2.3 Subsequent debit

You have already received an invoice from your vendor for all the goods
received. Subsequently, freight costs are to be taken into account; however, the
invoice quantity remains the same.

11.2.4 Subsequent credit

You have already received a credit memo from your vendor for all the goods
received. Subsequently, freight costs are to be credited to your company;
however, the credit memo quantity remains the same.

11.3 Document Parking/Invoice Parking (MIR7)

You can park invoices or credit memos. This means that you enter the invoice data
or
credit memo data in the system and save it in a document, but the system does not
post this
invoice initially.
You can change a parked document as often as you wish, for example, by adding or
correcting
data. The changes are logged. When you have finished changing the document, you can
post the
parked document. Only when you post an invoice or credit memo, does the system
carry out the
normal account movements and make the necessary updates.

11.4 Prepayment
You use prepayment for vendors with whom you have built up good business relations
over a longer
period of time. This approach benefits both parties:
 The vendor receives prompt payment after issuing an invoice.
 As the ship-to party, you can make optimum use of payment targets, as the system
pays
the invoice independently of the corresponding goods receipt and the invoice check.
You should only use prepayment if you have built up a business relationship good
enough to ensure that
you are paid back any unauthorized prepayments.
Prepayment is not required for evaluated receipt settlement (ERS) or consignment
settlement, since the
invoices are created automatically by the system in these cases and transferred
directly to Financial
Accounting (FI).

11.4.1 Prerequisites
To enable the system to take account of invoices from a vendor when performing
prepayment, you must have made settings in company-code-specific
Customizing and for the Prepayment Relevance field in the vendor master.

11.5 Invoice Verification in the Background (MIRA)

This process is suitable for the following transactions:
 Posting invoices with mass amounts of data for which no item check is
required
 Posting invoices referring to transactions not yet entered in the system.
11.6 Important Accounts for Invoice Verification
11.6.1 Vendor Account
There is a separate account in the sub-ledger for each vendor that all amounts
concerning this vendor are posted to. Making a posting to the vendor account is

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not the same as making a payment; payment is only made when the Financial
Accounting department posts the vendor's payment to a bank account.

11.6.2 Stock Account (BSX)

In the ERP system, there is no separate account for each material. Instead,
different materials with similar features are grouped together in a common
account (for example, raw materials: acids). The account relevant for a material
is defined in the material master record when a material is created.

11.6.3 GR/IR Clearing Accounts (WRX)

The GR/IR clearing account is an “intermediate” account between the stock
account and the vendor account. At goods receipt, the net invoice amount
expected is posted to the stock account. The offsetting entry is posted to the
GR/IR clearing account. This posting is then cleared by an offsetting entry on the
vendor account at invoice receipt.

11.6.4 Tax Accounts

The system makes postings to special tax accounts when invoices include tax.

11.6.5 Price Differences Accounts (PRD Account)

Price differences have to be posted to a price differences account if price
differences have occurred in an invoice and when invoices are posted net and no
posting can be made to the stock account.

11.6.6 Cash Discount Clearing Account

When you post an invoice net, the cash discount amount is taken into account in
the invoice, it reduces the value of the items; the offsetting posting is made to
the
cash discount clearing account, which is then cleared when payment is made.

11.6.7 Freight Clearing Account (FRL)

The stock account is debited with the planned delivery costs at goods receipt and
the system makes the offsetting posting to a freight clearing account. This
posting is then cleared by an offsetting entry to the vendor account at invoice
receipt.

11.7 Direct Posting

We can also post invoices that do not refer to a purchase order or a delivery. A
typical
example of this is a bill for expenses.
As in the case of an invoice with a reference, you first need to enter the header
data and
the vendor information.
In contrast to invoices with a reference, the system does not display any proposed
values
for the invoice items, since it cannot determine any purchase order items and
posted
goods receipts for this invoice. As a result, the system does not know which
accounts are
affected by the offsetting entry for the vendor line item. Therefore, you must
specify
which accounts the amounts are to be posted to. The SAP System provides the
following
options:
 Posting to a G/L account
 Posting to a material account

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When you enter an invoice without a reference, you may find that a vendor has not
been
created in the system. You can post this invoice to a one-time account.

11.7.1 Invoices from One-Time Vendors

One-time vendors are vendors that supply your company only once or very
rarely. It does not make sense to create master records for these vendors in the
system
since access to this data is no longer or rarely needed after the original
transaction.
Therefore, collective accounts are set up for one-time vendors. These accounts are
also
referred to as one-time accounts.
Since these accounts are used for more than one vendor, the master records do
not contain any vendor-specific data. Therefore, data such as address, salesperson,
bank
details, and so on, must be entered in Purchasing or Invoice Verification.

11.8

Posting Taxes
Which taxes are to be paid and how they are to be posted in the system depends on
the
tax regulations defined by law in the country of the company concerned. The
postings
made are controlled by the tax code. A distinction is made between the following:
Deductible taxes
Non-deductible taxes

11.9

Cash Discounts
Percentage discount on the purchase price that you are guaranteed under the terms
of
payment if you pay the invoiced amount within a certain period. To define exactly
when
an invoice is to be paid, you can agree terms of payments with your vendor.

11.10 Invoice with Variances

An invoice is said to contain variances if a quantity or value in at least one item
is
invoiced at a different value to the value that the system proposes.
If you accept a variance in an invoice item and overwrite the proposed value, the
system
checks if the variance is within the tolerance limits. If it is outside the limits,
a warning message
is displayed but you can still post the invoice. If an upper tolerance limit is
exceeded, the invoice
is posted but blocked for payment. You have to release the invoice for payment in a
separate step.

11.10.1Four different types of variance:

 Quantity Variance




Price Variance
Quantity and Price Variance
Order Price Quantity Variance

11.11 Blocking Invoices

An invoice can be blocked for payment due to one of the following reasons:
 Variance in an Invoice Item
1. Quantity Variance
2. Price Variance
3. Schedule Variance
(The date of invoice entry is before the delivery date agreed in the
purchase order)
4. Variance in Order Price Quantity
5. Quality Inspection
(If a material is defined as being relevant for quality management, goods
receipts for this material are posted to stock in quality inspection.

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Invoices for the material are blocked until the inspection has been
successfully completed)
Amount of an Invoice Item
(If an invoice item containing a large amount is entered, it is
advisable to initially block this invoice to check the amount,
especially in the case of invoices that do not refer to a purchase
order)
 Stochastic Block

Manual Block

11.12 Invoice Release (MRBR)




Releasing Invoices Automatically

(When you release invoices automatically, the system deletes all blocking reasons
that no
longer apply)
Releasing Invoices Manually
(When you release invoices manually, a list of the blocked invoices that match your
criteria appears. In this list, blocking reasons that no longer apply are
highlighted in
color. You can delete individual blocking reasons or select invoices that are to be
released)

11.13 Delivery Costs

Delivery costs are costs that are invoiced for a delivery over and above the value
of the
delivery itself. This includes freight charges, customs duty, or other costs.

11.13.1Planned Delivery Costs

Planned delivery costs are agreed upon with the vendor before the purchase order is
created. You
enter them in the purchase order. (Freight charges, Customs Charges etc.)
Planned delivery costs are automatically posted to clearing accounts at goods
receipt. Each origin
type has its own clearing account. When you post the invoice for these delivery
costs, the
corresponding clearing accounts are cleared.

11.13.2Unplanned Delivery Costs

Unplanned delivery costs were not agreed on in the purchase order and are not
entered until the invoice is received.
The system posts unplanned delivery costs to a separate G/L account. Therefore,
the unplanned delivery costs do not debit stock accounts or account assignment
objects.

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The system does not display unplanned delivery costs that were posted to a
separate G/L account in the purchase order history.

11.14 Subsequent Debits/Credits

A subsequent debit/credit exists when an additional invoice or credit memo is
received
for a transaction that has already been invoiced.
By posting a subsequent debit/credit, the system updates the ordering transaction
on a
value basis but not on a quantity basis. The quantity invoiced therefore does not
change,
but the total value invoiced does.

Examples: Subsequent Debits/Credits

A. Subsequent Debit:-

B. Subsequent Credit:-

11.15 Automatic Settlements:A. Evaluated Receipt Settlement(MRRL)

B. Consignment and Pipeline Settlement(MRKO)
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C. Invoicing plan settlement (MRIS)
D. Revaluation (MRNB)
11.15.1Evaluated Receipt Settlement (MRRL)
Procedure for settling goods receipts automatically. When you use Evaluated
Receipt Settlement (ERS), you agree with the vendor that the latter will not
submit an invoice in respect of a purchase order transaction. Instead, the system
posts the invoice document automatically on the basis of the data in the purchase
order and goods receipts. This eliminates invoice variances.
ERS has the following advantages:






Purchasing transactions are closed more quickly.

Communication errors are avoided.
There are no price and quantity variances in Invoice Verification.
We can even Post the invoice manually if PO is having ERS Tick

11.15.1.1





Prerequisites
Evaluated receipt settlement must be flagged in the purchase order
item.
The vendor must be flagged as being subject to ERS in the vendor
master record.
Goods-receipt-based Invoice Verification must be defined for the
purchase order item.
A tax code must have been maintained in the purchase order item or
PIR should be maintained with TAX.

11.15.2Consignment and Pipeline Settlement (MRKO)

Consignment Material is stored at your company premises but belongs to a
vendor. The vendor supplies these goods so that they are available to you at any
time, but does not initially invoice you for the goods. Only when you have
withdrawn stock does payment become due for the quantities used.
Pipeline Material flows directly into the production process. This could be from a
pipeline, for example, oil, from a pipe, for example, water, or from a cable, for
example, electricity. Payment is due after each withdrawal.

11.15.2.1

Constraints
Consignment and pipeline settlement is not connected to the
purchasing information system, because the purchase order
history is not updated during consignment settlements.

11.15.3Invoicing plan settlement (MRIS)

An invoicing plan enables us to schedule invoice creation over a series of future
due dates independently of individual procurement transactions and the actual
receipt of goods or services. we can inform the vendor when the invoice
documents are created.
11.15.4Revaluation (MRNB)
We use this to determine the difference values on the basis of price changes that
are retroactively valid and to create settlement documents for them. You can also
revaluate purchasing document items for which you have entered invoices or

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credit memos in different currencies. You can send the revaluation settlement
documents to the vendors as Messages or via EDI.

11.16 Credit Memo

They are used to correct the purchase order history if the quantity invoiced was
too high,
for example, if an invoice was too high or if part of the quantity was returned.
When you
post a credit memo, the total quantity in the purchase order history is reduced by
the
credit memo quantity.
If you do not want the total quantity invoiced to be reduced, you must post the
credit
memo as a subsequent credit.

11.17 Reversals/Cancel (MR8M)

Invoice documents in Invoice Verification are either invoices or credit memos.
These
documents can be cancelled. There are two different cases:
 If an invoice is cancelled, the system automatically creates a credit memo.
 If a credit memo is cancelled, the system automatically creates an invoice.

11.18 Invoices Received via EDI

Information can be transferred between different companies using EDI. This enables
a
vendor to transfer invoice information electronically instead of in the form of a
printed
paper invoice. An IDoc is generated for each invoice. The system posts an invoice
using
the data in this IDoc.

11.18.1.1

Constraints
When you transmit invoice information via EDI, you
 Cannot create subsequent debits
 Cannot settle planned delivery costs
 Cannot post with varying purchase order units of measure
 Cannot post invoices for blocked purchase order items

11.19 Archiving Invoice Documents (MRA1/ MRA2/ MRA3/ MRA4)

We can archive invoice documents.
Create Archive
Delete Documents
Display Archived Document
Manage Archive

MRA1
MRA2
MRA3
MRA4

11.20 Tcodes:












MIRO – Enter Invoice

MIR7 – Park Invoice
MIRA – Enter invoices for invoice verification in the background
MIR4 – Display invoice document
MR8M – Cancel invoice document
MRBR – Release blocked invoices
MR90 – Output Messages
MRRL – Evaluated Receipt Settlement (ERS)
MRKO – Consignment and Pipeline Settlement
MRIS – Invoicing Plan Settlement
MR11 – Maintain GR/IR Clearing Account

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 MR11SHOW – Display/Cancel Account Maintenance Document

12 SAP Methodology
ASAP methodology means nothing but standard process for implementation of SAP, It
consists
of 5 phases.
12.1 Project preparation
During this phase the team goes through initial planning and preparation for SAP
project (consists of identifying team members and developing strategy as how to
go).
12.2 Business Blueprint
The purpose of this phase is to achieve a common understanding of how the company
intends to run SAP to support their business and Consists of detailed
documentation.
12.3 Realization
The purpose of this phase is to implement all the business process requirements
based on the
Business Blueprint.
12.4 Final Preparation
The purpose of this phase is to complete testing, end-user training and cutover
activities to
finalize our readiness to go live.
12.5 Go-Live Support
The purpose of this phase is to move from a project-oriented, pre-production
environment to
live production operation.

13 System Landscape
Landscape is like a server system or like a layout of the servers or some may even
call it the architecture
of the servers’ viz. SAP is divided into three different landscapes DEV, QAS and
PROD.
Development ---> Quality ----> Production
Development: is where the consultants do the customization as per the company's
requirement.
Quality: is where the core team members and other members test the customization.
Production: is where the live data of the company is recorded.
SE10 – To Release the Transport Request

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Customization Client

Quality Testing Client

Testing Client

Training Client

Production Client

Sand Box Client

13.1

Meaning of "R" in R/3 systems:

R/3 stands for real-time three tier architecture. Three layers are installed in
Different
system/server and they are connected with each other.
A. Presentation
B. Application
C. Database

14 SAP Projects & Testing Methods

14.1 Types of SAP Projects:
14.1.1 SAP Implementation Project
Company wants to implement SAP Modules (Ex: PP/MM/SD/FI/CO etc.) for the
first time. In implementation projects consultant from various modules do
configuration based on company requirements.
14.1.2 SAP Support Project
After implementation of SAP modules customer/business need assistance of
consultants in their day to day business operations using SAP software.
14.1.3 SAP Roll-Out Project
Company has upgraded/implemented SAP HR & wants to rollout country
specific changes in different countries.
14.1.4 SAP Up gradation Project
Customers are moving from the older versions to new versions. It is called as
SAP Migration Projects.
14.2 Testing Methods in SAP Projects:
14.2.1 Development Unit Testing

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14.2.2

14.2.3

14.2.4

14.2.5

This is done by developer .Unit test is executed in development system. This

tests alone pieces of functionality.
Security Testing
Security testing ensures the SAP security roles and authorization roles provided
based on the requirements.
Integration Testing
It is testing of SAP transactions (for example, MM is integrated with SD) you
need to test all MM & SD Transactions accordingly.
User Acceptance Testing (UAT)
User Acceptance testing is conducted by a group of business end users to validate
that the new developed SAP system meets all requirements.
Regression Testing
Project Team member and/or Super Users of Group Companies to execute
several testing scenarios (usually in QAS Environment) to make sure that the
new configuration to be set up in PRD Client will not be jeopardize any current
settings. What we have to do is to develop all testing scenarios in forms of the
socalled Test Scripts which indicates all testing steps that testers shall have to
complete.

15 Types of Calls/Tickets & SLA

15.1
A.
B.
C.
D.

Types of Calls:
Incidents (Bugs in Productions System)
Change Request (Configuration and Development activities)
Problem Tickets (Investigation of Re-accruing incidents and problems)
Service Request (Task/Repeated activities)

15.2

SLA – Service Level Agreement:

You and the customer can use the SLA to agree on the methods of rendering a
guaranteed

service.
15.3
A.
B.
C.
D.

SLA for Incidents:

Critical Incidents
High Priority Incidents
Medium Priority Incidents
Low Priority Incidents

–
–
–
–

P1 Incidents
P2 Incidents
P3 Incidents
P4 Incidents

15.4
A.
B.
C.

SLA for Change Request:

Major Change Request
Medium Change Request
Minor Change Request

–
–
–

90 Days
60 Days
30 Days

–
–
–
–

4 Clock Hours
2 Business days
5 Business days
10 Business days

15.5
SLA FOR Problem Tickets & Service Request:
 SLA for Problem Tickets – 90 Days
 SLA for Service Request – 5 Days

16 Configuring SAP for Inbound and Outbound Processing

A. Overview of Partner profile

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B. Configuring SAP Inbound Processing
 Defining Logical System
 Configuring distribution Model
 Defining Partner Profiles for Logical system and assign inbound message type to
it.
C. Configuring SAP Out-bound Processing
 Defining Logical System
 Configuring distribution Model
 Defining Partner Profiles for Logical system and assign Out-bound message type to
it.
D. Partner profile for vendors

16.1 Overview of Partner Profile

16.1.1 Partner Profile in IDOC:While Configuring SAP for Inbound and Outbound
Processing. During inbound (client)
processing, Idocs are transferred to the interface and stored in the R/3 System.
The document data
is generated in a second step, also in the course of a workflow. Outbound
processing
in SAP involves event handling.
16.1.2 IDOC and Usage in SAP
Idoc (for intermediate document) is a standard data structure for electronic data
interchange (EDI)
between application programs written for the popular SAP business system or between
an SAP application and an external program.
16.1.3 Port in IDOC – WE21
The port defines the technical characteristics of the connection between SAP and
the Subsystem.
It also defines the medium in which data is exchanged between the two systems. In
the EDI
process, Idocs are transferred to external systems via ports
16.1.4 Process Codes in IDOC
Process code refers to a workflow or a function module which helps in reading or
writing data
from/to Idoc.
16.1.5 Message type in IDOC
A message type characterizes the data sent across systems and relates to the
structure of the data
called an IDOC type. For example, MATMAS is a message type for Material Master, and
INVOIC is a message type for an Invoice (Billing Document).

16.2 Configuring SAP Inbound Processing

16.2.1 Defining Logical System – BD64
In any distributed environment, each participating system must have a unique ID to
avoid
confusion. In SAP, the name of the logical system is used as the unique ID. This
name is assigned
explicitly to one client in an SAP system.
Logical System defined as = SAPPRP100

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16.2.2 Configuring distribution Model

A distribution model is used to describe the ALE message flow between logical
systems.
Business objects are distributed to connected recipients according to a unique
distribution model
that can contain rules of varying complexity depending on the type of business
objects involved.

16.2.3 Defining Partner Profiles – WE20

 Partner profiles are a prerequisite for data exchange. This involves defining who
can
exchange messages with the SAP system and using which port.
 Select Partner as LS and select Logic system SAPPRP100

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 Above screen tells you that, Logical system SAPPRP100 having inbound message type
as
PORDCRI (That means PO created through IDOC in PRP system).
 Details of message Type “PORDCR1”is shown below

 In the Message type field, enter the message type you want to use, for example,
PORDCR1.
 In the Process code field, enter the process code you want to use, for example,
BAPI (On
what way data is carried to PRP from PRE).
 In the Processing by function module area, select one of the following options:
 Trigger by background program (In this case the adapter writes Idocs to the SAP
database, which is processed immediately).
 Trigger immediately (In this case, the adapter waits for the SAP system to
process
IDocs. This can take anywhere from 1 to 15 minutes).
 Click Save
System SAPPRP100 (PRP-100) is ready for inbound processing of Idoc message type
PORDCR1 (To
Accept PO through IDocs) & Process code BAPI, which comes from legacy system
PRE/PRD.

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16.3 Configuring SAP Out-bound Processing
16.3.1 Defining Logical System – BD64 (Explained in Above steps)
16.3.2 Configuring distribution Model (Explained in Above steps)
16.3.3 Defining Partner Profiles – WE20
 Select Partner as LS and select Logic system SAPPRP100

 Above screen tells you that, Logical system SAPPRP100 having out-bound message
type as
BUPA_INBOUND_MAIN_SAVE_M (That means PO created through IDOC in PRP
system).
 Details of message Type “BUPA_INBOUND_MAIN_SAVE_M” is shown below

Click Save

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System SAPPRP100 (PRP-100) is ready for Out-bound processing of Idoc message type
BUPA_INBOUND_MAIN_SAVE_M & Receiving port is SAPPMG100 System.

16.4 Partner profile for vendors

 If Vendor “VUS01SO” is in Legacy System say it is in PRD system (Legacy system
Plant is a
vendor for PRP System).
 Once we create PO in PRP (ERP System) then Sales order is created to vendor
VUS01SO (PRD
Plant) in PRD system. For that we have to maintain Partner profile for vendor in
PRP System.

 For Vendor VUS01SO message type as “ORDERS” is maintained in partner profile.

 Relation Ship between Partner number VUS01SO and Message type ORDERS is
maintained below as per screen shot.
 Receiving Port is PRD System
 IDOC Basic type is – ORDERS05
 Message control as shown below

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Note: As per this Partner profile configuration, once PO is created in PRP system
for vendor
VUS01SO output type NEU triggers and creates Sales order in PRD.

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