Enterprise Structure

Client/Company

• Definition:

o An organizational unit for which financial statements can be prepared according to

relevant commercial laws.

o Represents a corporate group in the SAP R/3 system with its own data, master
records, and set of tables.

o Note: A company can have one or more company codes.

• Customization Step:

o Path: /NSPRO -> SAP Ref. IMG -> Enterprise Structure -> Definition -> Financial
Accounting -> Define Company

o T-Code: /NOX15

Company Code

• Definition:

o The smallest organizational unit for which independent accounting can be

maintained.

o Each company code has its own balance sheet and profit & loss account.

o It is a subsidiary or member of a corporate group.

• Customization Step:

o Path: /NSPRO -> Enterprise Structure -> Definition -> Financial Accounting -> Edit
Company Code Data

o T-Codes:

▪ /NOX02 – Define company code.

▪ /NEC01 – Copy data from the default company code (e.g., 1000).

▪ /NOBY6 – Maintain global data for the company code.

Controlling Area

• Definition:

o An organizational unit within a company to manage costs and revenues.

o Represents a closed system for accounting purposes.

 o Can be assigned to one or more company codes using the same operative Chart of
Accounts.

• Customization Step:

o Path: /SPRO -> Enterprise Structure -> Definition -> Controlling -> Maintain
Controlling Area

o T-Code: OX06

Plant

• Definition:

o A logistics operational unit for production, procurement, maintenance, and material

planning.

o A manufacturing facility, sales office, delivery warehouse, corporate HQ, or

maintenance plant.

o Operational within a company code.

• Customization Step:

o Path: /SPRO -> Enterprise Structure -> Definition -> Logistic-General -> Define, Copy,
Delete, Check Plant

o T-Code: OX10

• Note: A plant must always be assigned to a company code.

Valuation Area

• Definition:

o An organizational level at which material is valuated (plant or company code level).

o Valuation levels are fundamental and hard to reverse after setup.

o SAP recommends setting the valuation level at the plant level for systems using
Production Planning (PP), Costing, or SAP Retail.

• Customization Steps:

1. Path: /SPRO -> Enterprise Structure -> Definition -> Logistic-General -> Define Valuation Level

2. T-Code: OX14

Storage Location

• Definition:

o Differentiates material stocks within a plant.

 o Inventory management is carried out at the storage location level.

o Physical inventory is conducted at this level.

• Customization Steps:

o Path: /SPRO -> Enterprise Structure -> Definition -> Material Management ->
Maintain Storage Location

o T-Code: OX09

• Interview Question:

o Where is physical inventory carried out?

o Answer: At the storage location level.

Purchasing Organization

• Definition:

o Manages procurement activities and negotiates purchase conditions with vendors.

o Responsible for procurement contracts and has its own vendor master data.

• Types:

1. Centralized Purchasing – Single organization for multiple company codes.

2. Distributed Purchasing – Single organization for one plant.

3. Company-Specific Purchasing – Single organization for one company code.

4. Reference Purchasing – Shared conditions/contracts for linked organizations.

5. Standard Purchasing Organization – Used for special procurements (e.g., Pipeline,

Subcontracting, Consignment).

• Assignments:

o Can be assigned to multiple company codes or plants.

o May exist without being assigned to a company code.

• Customization Steps:

o Path: /SPRO -> Enterprise Structure -> Definition -> Material Management ->
Maintain Purchasing Organization

o T-Code: OX08

Assigning Organizational Units

1. Assign Company Code to Company:

 o Path: /SPRO -> Enterprise Structure -> Assignment -> Financial Accounting -> Assign
Company Code to Company

o T-Code: OX16

2. Assign Company Code to Controlling Area:

o Path: /SPRO -> Enterprise Structure -> Assignment -> Controlling

o T-Code: OX19

3. Assign Plant to Company Code:

o Path: /SPRO -> Enterprise Structure -> Assignment -> Logistic-General

o T-Code: OX18

4. Assign Purchasing Organization:

o To Company Code: OX01

o To Plant: OX17

o Standard Purchasing Organization to Plant: SPRO

For Structure Management

• Path: EC01
1. Define Output Format of Material Numbers

• Purpose: Specify material number length, template, and leading zeros.

• Details:

o Maximum material number length: 18 characters (alphanumeric and special

characters).

o Material number template: Used for external number assignment.

o Leading zeros: Applied for internal number assignment.

Configuration Steps:

• T-code: OMSL

• Menu Path: SPRO > SAP REF IMG > Logistics General > Material Master > Basic Settings >
Define output format of material numbers.

1. Execute T-code OMSL.

2. Update details:

o Material No. Length: Specify length (e.g., 6).

o Material Number Template: Maintain as per client requirements.

o Leading Zeros: Activate if required (e.g., 000001 for length 6).

3. Save the configured output format.

2. Maintain Company Codes for Materials Management

• Purpose: Associate company codes with materials management.

• Configuration Steps:

o T-code: OMSY

o Menu Path: SPRO > IMG > Logistics General > Material Master > Basic Settings >
Maintain company code for material management.

3. Define Attributes of Material Types

• Purpose: Customize attributes for different material types.

• Configuration Steps:

o T-code: OMS2
 o Menu Path: SPRO > Logistics General > Material Master > Basic Settings > Material
Types > Define Attributes of Material Types.

4. Define Number Ranges for Each Material Type

• Purpose: Assign specific number ranges to material types.

• Configuration Steps:

o T-code: MMNR

o Menu Path: SPRO > Logistics General > Material Master > Basic Settings > Material
Types > Define Number Ranges for Each Material Type.

1. Create groups.

2. Assign number ranges.

3. Link groups to material types.

5. Define Material Groups

• Purpose: Group materials with similar properties.

• Configuration Steps:

o T-code: OMSF

o Menu Path: SPRO > Logistics General > Material Master > Settings for Key Fields >
Define Material Groups.

• Standard Material Group: 0001

6. Define Purchasing Group

• Purpose: Assign groups of people responsible for procurement activities within a purchasing
organization.

• Configuration Steps:

o T-code: OME4

o Menu Path: SPRO > Material Management > Purchasing > Create purchase group.

• Standard Purchasing Group: 001

7. Define Industry Sector

• Purpose: Customize industry sector settings.

• Configuration Steps:
 o T-code: OMS3

MASTER DATA

SAP R/3 operates on real-time data, ensuring no time lag between data entry and data availability.
The key principle while creating any data is to maintain data integrity.

Categories of SAP R/3 Data

1. Master Data

o Definition: Data created centrally and valid across all applications.

o Characteristics:

▪ Remains constant over time but requires regular updates.

▪ Example: Vendor Master Data, used for creating purchase orders or

contracts.

2. Transactional Data

o Definition: Data associated with the processing of business transactions.

o Example: Creating a Purchase Order.

Types of SAP Master Data

1. Material Master Data

2. Vendor Master Data

3. Inforecord Master Data

4. Sourcelist Master Data

5. Service Master Data

6. Quota Arrangement

Material Master Data

The material master is the central repository for material-specific data.

Key Points:

• Purpose:

o Includes information on materials that can be procured, produced, stored, or sold.

o Different departments handle specific materials and maintain their respective views
of the material master record.
 • Data Screens:

o Main Data:

▪ Basic information: Base unit of measure, weight.

▪ Accounting data: Standard price, moving price.

o Additional Data:

▪ Includes extra details like short descriptions and currency.

Components of Material Master Data

1. Material Types: Define the properties and behavior of materials in various processes.

2. Material Groups: Group materials with similar characteristics for easy management.

This layout offers a clear distinction between categories, types, and specific details of master data for
better understanding and utility.
Material Master Data in SAP

SAP operates on real-time data, ensuring no time lag between data entry and availability.
Maintaining data integrity is crucial during data creation.

Types of Data in SAP

1. Master Data:

o Data that remains consistent over a long period but is updated regularly.

o Centrally created and valid across all applications.

o Example: Vendor Master Data (used for purchase orders or contracts).

2. Transactional Data:

o Data used in processing business transactions.

o Example: Creating a Purchase Order.

Master Data Types in SAP MM

1. Material Master Data

2. Vendor Master Data

3. Info Record Master Data: Links vendor and material price data.

4. Source List Master Data: Maintains vendor validity periods.

5. Service Master Data

6. Quota Arrangement

Material Master Data

Purpose: Stores information about materials a company can procure, produce, store, or sell.

Data Levels:

1. Main Data:

o Company Code Level: Material description, base unit of measure, material group.

o Plant Level: Purchase organization, MRP data, forecasting data.

 o Storage Location Level: Storage bins, picking areas.

2. Additional Data: Short descriptions, currency, etc.

Material Types

Grouping materials with similar attributes or characteristics. Examples:

• Raw Materials (ROH)

• Semi-Finished Products (HALB)

• Finished Products (FERT)

• Trading Goods (HAWA)

• Pipeline Materials (PIPE): e.g., oil, water.

• Returnable Transport Packaging (LEIH): e.g., reusable containers.

Tcode for Material Type: OMS2

Material Group

• Grouping of materials with similar properties.

• Example Categories:

o Sandals, FMCG, consumables, spare parts.

Material Management Transactions

• Material Creation: MM01

• Material Changes: MM02

• Material Display: MM03

• List of Materials: MM60

• Extend Material View: MM50

• Flag Material for Deletion: MM06

• Change Material Price: MR21

• Display Material Changes: MM04

• Schedule Material Creation: MM11

• Change Material Type: MMAM

• Warehouse Stock: MB52

• Stock Overview: MMBE

Material Master Specific Data

1. Central Data: Eliminates data redundancy and integrates purchasing, inventory

management, material planning, and invoice verification.

2. Plant Level: Valid within a plant and all its storage locations.

o Examples: Purchasing data, MRP data, forecasting data.

3. Storage Location Level: Valid for specific storage locations.

o Examples: Storage bin descriptions, picking areas.

Interview Question: How to Change Material Price?

Answer:
Use Tcode MR21:

• Input company code and plant.

• Enter the new price.

• Save the changes

Master data in SAP MM comprises frequently used records that are relatively static in nature. These
are crucial for efficient material transactions like purchase orders, goods receipt, and invoice
verification.

Types of Master Records

1. Material Master Record

o Central to all MM activities.

o Includes client-level, plant-level, and storage location-level data.

2. Vendor Master Record

o Information about suppliers.

3. Purchase Info Record

o Links materials with vendors.

4. Source List

o Specifies approved vendors.

5. Quota Arrangement

o Defines the allocation of total procurement quantities to multiple vendors.

Material Master Records Details

• Material Master Tables:

Examples include:

o MARA: General material data.

o MARC: Material-specific plant data.

o MBEW: Material valuation, etc.

• Key Attributes:

o Material Number

o Industry Sector

o Material Type

• Data Segmentation:

o Client Level: Material number, short text, material group.

o Plant Level: Accounting, purchasing, MRP data.

o Storage Location Level: Bin, conditions, picking area.

Material Types

• Group materials with similar attributes (e.g., ROH: Raw materials, FERT: Finished products).

• Key Controls:

o Number assignments

o Price control

o Inventory valuation

o Field selection

o Allowed valuation classes.

Configuration Paths & T-Codes

1. Define Material Types:

T-Code: OMS2
Path: Logistics General → Material Master → Basic Settings → Material Types → Define
Attributes.

2. Number Range Assignment:

T-Code: MMNR
Path: SPRO → Logistics General → Material Master → Define Number Ranges.

3. Industry Sector Configuration:

T-Code: OMS3
Path: SPRO → Logistics General → Material Master → Field Selection → Define Industry
Sectors.

4. Material Group Definition:

T-Code: OMSF
Path: SPRO → Logistics General → Material Master → Settings for Key Fields → Define
Material Groups.

Key Functionalities

• Automatic PO Creation:
Enables automatic generation of purchase orders from requisitions.

• Batch Management:
For materials requiring batch processing.

• Source List Enforcement:

Ensures procurement is aligned with predefined sources.

• Quota Arrangement:
Allocates procurement among vendors based on quotas.

• Tax Indicator Setup:

Automatically determines tax codes for POs.
Special Material Attributes

• Storage Conditions:
Define requirements like refrigeration or specific containers.

• Hazardous Material Handling:

Include precautions for hazardous materials (e.g., explosives, poisons).

• Labeling Requirements:
Specify label types and printing preferences.

Process to Create a Material Master Record

1. Path: Logistics → MM → Material Master → Create.

T-Code: MM01

2. Steps:

o Select views (Basic, Purchasing, Accounting, etc.).

o Define attributes like Base Unit, Material Group.

o Assign organizational levels (Plant, Storage Location).

Vendor Master Overview

• A vendor is a Business Partner from whom materials or services are procured.

• Vendors are also called creditors, serving as external sources of supply.

• The Vendor Master holds comprehensive information about vendors for procurement, sales,
and business transactions.

Levels of Vendor Master Data Maintenance

1. General Data

o Includes the vendor's address and contact details.

o Maintained at the client level and valid across all organizational levels.

2. Company Code Data

o Includes financial data like banking details, tax numbers, and GST numbers.

o Maintained by the FI (Finance) team and valid across organizational levels.

3. Purchase Organization Data

o Includes procurement-specific details such as order currency, Incoterms, and vendor

tax data.

o Maintained at the purchase organization level.

Key Notes

• A vendor is both a business partner and a creditor fulfilling organizational requirements.

• In HR, employees may also be treated as vendors.

• Poor-quality vendors can be blocked for individual materials or permanently.

Types of Vendors

1. Internal Vendor: Supplies materials within the same company/client.

2. External Vendor: Supplies materials from outside the organization.

3. One-time Vendor: Engaged for a single transaction.

4. Regular Vendor: Supplies materials at the company or client level, supporting the entire
corporate group.

5. Fixed Vendor: Supplies specific low-value, high-volume materials.

Vendor Account

• Transaction Figures: Record value movements in account payables.

 • Reconciliation Account: Ensures all vendor account payables are simultaneously recorded in
a general ledger account.

Vendor Account Group (OBD3)

The Vendor Account Group determines:

• Account number intervals.

• One-time account designations.

• Internal or external number range assignments.

• Field selections during creation.

Vendor Creation and Configuration

1. Vendor Creation

o Client/Company Code Level: XK01, XK02, XK03.

o Finance Level: FK01.

o Purchase Org. Level: MK01.

2. Vendor Account Group: Defined using OBD3/OMSG.

o Standard group: 0001 (modifiable for specific needs).

3. Vendor Number Ranges

o Creation: XKN1.

o Assignment to Account Group: OBAS.

4. Vendor Payment Terms: Defined in OBB8.

5. Vendor Blocking

o All levels: XK01/XK05.

o Purchase Org. Level: MK01/MK05.

o Company Code Level: FK01/FK05.

6. Vendor Listing: Use MKVZ for a complete vendor list.