SAP MM CONFIGURATION

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 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 Important consideration in Quota Arrangement

2.5.5 Quota Base quantity calculation procedure

3. 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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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
4. 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
5. 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
Companycode STO via the SD Component)
7.4.3 Stock Transport Order with Delivery & Billing Document/Invoice (Different
Companycode/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
andCalculation 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
11.5 Invoice Verification in the Background (MIRA)
11.6 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
12. SAP Methodology
12.1 Project preparation
12.2 Business Blueprint
12.3 Realization
12.4 Final Preparation
12.5 Go-Live Support
13. System landscape
13.1 Meaning of "R" in R/3 systems
14. 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
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14.3 Types of Calls

14.4 SLA – Service Level Agreement
14.5 SLA for Incidents
14.6 SLA for Change Request
14.7 SLA FOR Problem Tickets & Service Request
15. Configuring SAP for Inbound and Outbound Processing
15.1 Overview of Partner Profile
15.1.1 Partner Profile in IDOC
15.1.2 IDOC and Usage in SAP
15.1.3 Port in IDOC – WE21
15.1.4 Process Codes in IDOC
15.1.5 Message type in IDOC
15.2 Configuring SAP Inbound Processing
15.2.1 Defining Logical System – BD64
15.2.2 Configuring distribution Model
15.2.3 Defining Partner Profiles – WE20
15.3 Configuring SAP Out-bound Processing
15.3.1 Defining Logical System – BD64
15.3.2 Configuring distribution Model
15.3.3 Defining Partner Profiles – WE20
15.4 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 OX02

IMG menu 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 OX18

IMG menu 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 OX08

IMG menu Spro IMG Enterprise Structure Definition Materials
Management Maintain purchasing organization
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1.7 Assigning Purchasing Organization to Company Code

Transaction code OX01

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

1.8 Assigning Purchasing Organization to Plant

Transaction code 0X17

IMG menu Spro IMG Enterprise Structure Assignment Materials
Management Assign purchasing organization to plant

1.9 Creating Storage Location

Transaction code OX09

IMG menu Spro IMG Enterprise Structure Definition Materials
Management Maintain Storage Location

1.10 Creating Purchasing Group

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It is a buyer or group of buyers responsible for certain purchasing activities.Internally

responsiblefor the procurement.
Also Purchasing Group is floating entity and it will not assigned to any level.

Transaction code OME4

IMG menu Spro IMG Materials Management Purchasing Create
Purchasing Groups

1.11 Reference Purchasing Organization:

Reference Purchasing Organization is assigned to plant purchasing organization. The
referencepurchasing organization can negotiate with vendor and create global outline
agreements (Contracts andscheduling 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
automaticpurchase 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
MasterMM03 – Display Material
MasterMM04 – 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
containsand provides examples of each.
Accounting
Valuation and costing/price calculation information. Examples: Standard price,
past andfuture 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
reorderlevel 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,
anddesign 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, andthe 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
importantto 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
materialmaster 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
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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 ofthis 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 thenprocessed 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
storedor transported.
➢ ERSA - Spare parts
Spare parts are used to replace defective parts. They may be kept in stock. A material
masterrecord 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
thismaterial 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
goodsreceipt 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
goodsreceipt 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
Typeconfiguration)
• 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
transactionFBL1N - Vendor Line Item display).
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MARA – Material Master General

dataMARC – 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

2.1.8 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
andinvoice into account.
Material – CLS9017-100EA
Standard Price (V) of Material – 117
CNYPO 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
invoiceinto 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
CNYPO 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

2.1.9 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

2.1.10 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 atpurchasing 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-timevendors, 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 useof 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 isentered only at the time of entering invoice..
➢ You can create special vendor master records for vendors from whom you procure
goodsonly 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, youcan 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 ofcriteria. 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
thisreason, 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
thepartner 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,
theinvoicing 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 isassigned 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
theirmaterial.

2.3.1 Purchasing info records types:

A. Standard info record
B. Subcontracting info record
C. Consignment info record
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2.3.2 Purchasing info records tcodes:

ME11 - Create Purchasing info
record ME12 - Change purchasing
info recordME13 - Display
purchasing info recordME17 -
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
dataKONP - 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
followingtransactions: MEK1 - Pricing Condition Records “OR” ME11 - Purchasing Info
Record (conditions tab)
Example: We will maintain the Scales in Inforecord
ME11Condition 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% discountSAVE

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

forcondition 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 whilemaintaining a quotation, PO, or Outline agreement.
Scales can be maintained in ME11 (Condition Tab) by calling appropriate condition type, And
if wemaintain 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
organizationlevel.
• ME11 Scales – Discount is Applicable to particular material and vendor combination in that
plantlevel.
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2.4 Source List - ME01

➢ 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
outlineagreement.

2.4.1 Source List is used for the following:

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
planningrun.

2.4.2 Configuration:
If you want to make a Source list mandatory for a material. You can set the
source listrequired 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 inOME5.

2.4.3 Sequence of Source of supply in Purchase order

A. Quota Arrangement
B. Source list
C. Outline agreement
D. info record

2.4.4 In Source list below can be the source of supply

A. Vendor
B. Contracts
C. Quota Arrangement
D. Scheduling Agreement

2.5 Quota Arrangement – MEQ1

Distributing POs among the sources of supply in a systematic manner is called
Quotaarrangement.

2.5.1 Configuration:
If you want to use quota arrangement for a material, it has to be set in the purchasing view
of amaterial 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
purchasingdocuments for vendor.
➢ Quota base quantity – The quota base quantity is treated as an additional quota-
allocatedquantity. (This is used when new source of supply is introduced).
➢ Quota – This is the number that specifies which portion of a requirement
should beprocured 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 onewith the highest quota is the effective source.
3. The quota base quantity should be used if a new source is included in a existing
quotaarrangement.
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 requisitionME53N -
Display purchase requisitionME54N
- Release purchase requisition
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RFQ
Manual

Purchase
Automatic Via MRP Requisition Outline Agreement

ME51N
Sales Order
Purchase Order

➢ 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.

3.1.1 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 A PO
RFQ

Vendor B Quotation

Purchase Rejection
Outline
Requisition Letter
Agreement
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 Create Contract
➢ ME32K Change Contract
➢ ME33K Display Contract
➢ ME35K Release Contract
➢ ME31L Create Scheduling Agreement
➢ ME32L Change Scheduling Agreement
➢ ME33L 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 – (Blank)
➢ Consignment – K
➢ Subcontracting – L
➢ Material Unknown – M
➢ Material Group – 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
materialsthat 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 largefleet
➢ 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. Itdetermines the type of procurement process and is defined in the procurement
documents.
➢ Item Category cannot be defined in configuration

Standard – (Blank)
Consignment – K
Subcontracting – L
Third Party – S
Text – T
Stock Transfer – U

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Limit – B
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
likeAsset – 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, thereference 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 theplant in question in customizing for inventory management.
➢ The "delivery completed" indicator specifies whether a purchase order item is
considered asclosed. 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
ofposting a Goods Receipt. The only posting would occur on Invoice Receipt.
3.4.13 Confirmation control Key in PO

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quantity for MIGO unless any confirmations are entered in the PO. Also, MIGO will
proposeonly 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 fromthat 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
(Limititem) 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 youwish 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 inthe 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

procurementtransactions (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 invoicingof 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) inPO
➢ Enter Account assignment Category
➢ Don’t set GR-based invoice verification in PO. IR must be set, and you
mustset Evaluated receipt settlement
➢ Enter Invoicing plan (Item Details – Invoice Tab – Invoicing Plan)
byselecting 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 = BSX (+)
GR IR Clearing A/C credited = WRX (-)
B. Invoice Receipt:
Vendor A/C
credited
GR IR Clearing A/C debited = 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
externalpurchasing documents (PO).

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➢ Version management is activated for the combination of document

category anddocument 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:-
• Run MRP with Tcode MD02 and Generate PR or Create PR Manually
withTcode ME51N
• Then Generate Automatic Purchase order with above generated PR
throughTcode ME59N

3.5.1.2 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

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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 1. With classification allows us to

release the document at item level releasethe document only at header
aswell as header level. level

2. Only PR Can be released (Both in

itemand header level) 2. All documents – PR, PO, RFQ &
Outline agreement only at
3. Requisitions without classification headerlevel.
canhave Account Assignment
category, Material Group, Plant and 3. Where as in with classification
Total Valueonly as characteristics, you can define your own
characteristics with CEBAN,
CEKKO Etc…

3.6.2 Configuration of release strategy needs these following components:

1. Characteristics
2. Class
3. Release group
4. Release Code
5. Release indicator
6. 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:
➢ 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
3.7 PLANNING PROCESS (MRP & CBP)
3.7.1 PLANNING PROCESS

MRP (Material requirement planning) Consumption based planning

➢ MRP TYPE – PD CBP uses past consumption data (Historical data) to
➢ Planning is done as per current demand like calculate future requirements with the help of the
sales order material forecast or statistical planning procedures
➢ MRP does not consider any forecast ➢ Reorder Point Planning
information or historical data A. Manual Reorder Point Planning
➢ MRP is done only for absolute B. Automatic Reorder Point Planning
requirements/demands on hand ➢ Forecast-Based Planning
➢ Time-Phased Planning

Reorder Point Planning Forecast-Based Planning Time-Phased Planning

Once stocks falls below the ➢ It takes historical consumption data ➢ MRP TYPE – R1
reorder point then system will and plans the future demand for given ➢ Planning Cycle – CL1
trigger the procurement proposal interval of future periods
➢ Planned Delivery – 5 Days
A. Manual Reorder Point ➢ MRP Type – VV (Forecast based
Planning planning) ➢ TPP Can be carried out in 2
B. Automatic Reorder Point ➢ LOT Size – “Y9” Single PR for entire ways
Planning quantity means & “EX” multiple A. MRP
separate PR’s for all forecasted B. CBP
quantity. ➢ If a vendor always delivers a
➢ Period Indicator – “M” for monthly material on a particular day of
“W” weekly basis forecast the week (Depends on
➢ Forecast Model – “D” Constant Planning Cycle), it makes
forecast model sense to plan this material
➢ Give forecast details like History
according to the same cycle, in
Periods (12 Months), Period per
season (12 Months). which it is delivered.

Manual Reorder Point Planning 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 level and the safety stock level are determined by
maintainedin 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)
➢ MD 03 – I n MRP run n ew PR gets generat ed if stock
Pre p are d By: P ra s h anth V en k a t e g ow d a (77607689M86D)03 – In MRP run new PR gets generatePdaifge 30
available falls below the reorder point warehouse asper MD04
➢ MD03 – In MRP run newly created PR quantity
isequal to = Maximum stock level mentioned
in material master – Available stock in
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stock available falls below the reorder point

➢ MD03 – In MRP run newly
created PR quantity isequal to
= Maximum stock level
mentioned in
material master – Available
stock in warehouse asper
MD04.
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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 andfor 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 orderproposal 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
requirementsquantities 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 ofthe 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-to-stock). The planning is done with respect to the master plan.
➢ The planning process does not consider any forecast information or historical
consumptionpatterns. 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
 Material Management

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 = 9As 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
 Material Management

(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
procurementproposal. There are two types of reorder point planning.
A. Manual Reorder Point Planning: In manual reorder point planning both the
reorderlevel 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
forecastingprogram.

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.
Youhave the following options)
Reorder point = 100
(Reorder point - If the stock falls below this quantity, the system flags the
materialfor 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
withinmaterials 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 beexceeded.).
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 inMaterial master – Available stock in warehouse as per MDO4 Tcode
Newly generated PR will have fixed vendor as per the source list
 Material Management

Save the Material

Now run the Stock requirement –

MD04Material 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 asper 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

PlantNow check MD04 again

 Material Management

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 wouldneed 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 donot consider the demand from sales order or from planned independent
requirements or frommaterial 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
generatingsingle 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)
 Material Management

➢ 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
perSeason 12, Initialization X, Model Selection A, Optimization Level F

3.7.10.1 Process Steps

a. Maintain consumption values (MM02)
b. Execute Forecast ( MP30)
c. Stock Requirement List (MD04)
d. 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
belowExecute 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 asper 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 tillDecember)
• 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
quantitieswhen 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
ofmaterial 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
planthis 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 thesame 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. Theforecast 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 materialmaster 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 & Material In Material Master

PO History generated Delivery stock and Value

Accounting
Doc got
Material generated
GR SLIP Goods
Doc got
(Hard Copy) Receipt generated

WM – Transfer request Stock & QM- Creation of an

to Warehouse Consumption A/C inspection lot to trigger
Management (If Active) Updated 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 thePO 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-usestock in storage location.
Stock transfer of a material from plant 0001 to plant 0002. The plants belong to the
samecompany, 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 byusing STO Process
Transfer Posting:-
• Physical movement may or may not occur
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• Also only change in stock type, Batch type or Material Number.

4.10 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 theinventory. And Movement type is 103.
Effects of GR Block stock
Accounting documents are not generated at the time of GR
becauseinventory is non-valuated.
GR Blocked stocks are shown in the stock overview of Plant level
andnot in Storage location level.
The quantity booked under GR Blocked stock is recorded in the
POHistory (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
stillshowing 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
arevaluated.
GR Blocked Stock: Goods accepted under conditional acceptance &Goods
arenot 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
deliveryschedule 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 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)

4.15 Important Movement Types in MM:

A. 101 – Goods Receipt against
PO102 – Reversal of 101
B. 103 – Goods Receipt against PO into GR Blocked
stock104 – Reversal of 103
C. 105 – Release GR Blocked stock to
Warehouse106 – 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
(Removefrom storage)
315 – Transfer posting Storage location to Storage Location in two steps (Place
instorage)
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322 – Transfer posting unrestricted stock to quality

inspection343 – Transfer posting Blocked stock to
unrestricted stock 344 – Transfer posting unrestricted
stock to Block stock
349 – Transfer posting Blocked stock to Quality
inspection350 – Transfer posting Quality inspection to
Blocked stock
L. 351 – Goods issue for a stock transport order (without Shipping)
M. 411 – Transfer posting of special stocks to company's own stock
N. 501 – Goods Receipt without PO to Un restricted
503 – Goods Receipt without PO to Quality
Inspection505 – Goods Receipt without PO to
Blocked Stock
O. 541 – Goods issue to subcontracting vendor
543 – Sub items receive from subcontract vendor
545 – Goods Receipt of By-Product from subcontracting vendor
P. 551 – Withdrawal for scrapping from unrestricted stock
553 – Withdrawal for scrapping from quality inspection
stock555 – Withdrawal for scrapping from blocked stock
Q. 561 – Receipt per initial entry of stock balance into unrestricted stock
563 – Receipt per initial entry of stock balance into quality inspection
stock565 – Receipt per initial entry of stock balance into blocked stock
R. 641 – Goods issue for a stock transport order (With Shipping)

4.16 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
physicalinventory procedure..

4.17 Physical Inventory procedure carried levels

A. Material Level
B. Plant Level
C. Storage location level
D. Stock type

4.18 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
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A. Customizing system for each valuation area and storage location (SPRO –IMG-
MM-inventory 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
materialmaster data. (In storage location 2 View)

4.19 Example of Negative Stock

1000 pieces of a material are delivered. Due to insufficient time, the goods
receipt isnot 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

4.20 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.

4.21 Goods Withdrawal

Goods withdrawal to following account assignment object can be possible in the system.
➢ Cost Center
➢ Production order
➢ Asset
➢ Sales order

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

5.2 Pre-Request:
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A. Create Subcontracting PIR for subcontractor with Finished Material code. Main
subcontractorservice 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, itshould 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 = + GBB/VBO
(Debited)Inventory A/c = - BSX (Credited)

b. Finished Product:-
Inventory A/c = + BSX
(Debited)GR/IR Clearing A/c = - WRX
(Credited) Vendor A/c or External Service = + FRL
(Debited)Change in stock A/c = - BSV
(Credited)

Note:-
➢ In case of goods receipt of subcontracting purchase order. The transaction event key
FRLor 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 ofposting 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 - Finished Material
Material B - R/w Material to created
material AVendor X - Subcontractor
Vendor Y - Vendor to supply R/w Material B

➢ Here we have to create 2 PO’s, one as Subcontracting for Material “A” and
otheras Standard PO for Material “B”.
➢ 1stSubcontracting PO – Create Subcontracting PO to Subcontract vendor “X”
forFinished 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
addressas delivery address.
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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), youposted 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
Adoptbutton 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, postthe document.
• After saving, the value of the goods receipt is recalculated to include
thesubsequent quantity.

5.5.3 Scenario: 3
By-Products in Subcontracting:
➢ In the subcontracting PO we give the BOM in which components issued are given
+veindicator 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 with544 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 551directly 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
consignmentstores.
➢ Consignment stocks of the same material from different vendors can be
managedindependently from one another and at the price of the individual
vendors.
➢ Consignment stocks are not valuated. When the material is withdrawn it is valuated
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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 beposted from unrestricted stock, however.

6.1 Consignment Process:

A. Create Consignment info record in Tcode ME11. (Prices need to be maintained in info
recordwhich 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 forconsignment.
C. DO the GRN with MVT 101K in Tcode MIGO.
These goods will not be valuated; accounting document will not be posted unless
stock iswithdrawn 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
actuallyvaluated.
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
indicatorK 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 = + GBB/VBR (Debited)
A/c Payable consumption = - 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 materialmaster record (MRP 2 View). If you generate MRP for this Material then
PR will be created withitem category “K”
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➢ “OR” we can also generate Consignment purchase requisition in MRP by determining

vendor asconsignment in Quota arrangement.

7 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 doa 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/InterCompany code STO via the SD Component)
C. Stock Transport Order with Delivery and Billing Document/Invoice (Different
Companycode/Inter Company code STO via the SD Component)

7.4.1 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
alreadymade at the time of goods issue.

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 tothe STO PO (VL10B)
• Ship the Goods (Picking) with Replenishment delivery (Outbound Delivery)and do
Goodsissue 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 beposted 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
alreadymade at the time of goods issue.

7.4.3 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
theabove 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
invoiceverification.

7.5 Configuration Steps for STO

A. STO Document Type – UB.
Standard document type used is UB and assign allowed item category U (Stock
transportorder) 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
documenttype.
For STO Document type UB, the delivery type NL is used with checking rule
BFor 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)

8 Third-Party Processing
In third-party processing, you place a purchase order with a vendor to deliver goods for
a thirdparty (Customer).

This means that your company does not deliver the material. You forward the order to an
externalvendor 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
purchaserequisition.
➢ 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

Transaction Event
From Mvt Type
Goods Receipt – Account Grouping KeysValue String –
system will
MIGO Mvt Value Transaction Account WE01
determine Value
String and Type String Event Key Modifier TE Description
Mvt Type – 101 101 WE01 BSX ……. Keys
Account Modifier
Plant - PXXX BSX Inventory
(Account
Material – MXXX Posting
Grouping)
WRX GR/IR
Clearing A/c
PRD Price Diff A/c

From Material From Plant System will

Master System determine Valuation Area
andValuation Grouping
will determine
code
Valuation Class Valuation Grouping
and Price Val Area Val Grp Code
Control 1000 0001
1100 0002

Material Master
Valuation Class:
3000Price Control: V
MovAvg Price: 50 RS
Account
Determination

TE Key Val Grp Code Account Modifier Valuation Class GL Account

BSX 0001 ………. 3000 300000
GBB 0001 VBR 3000 400000

9.2 Assigning Valuation Class to Material Type via Account Category Reference

Define Account Valuation Class

Category Reference Valuation Class A/c Cat Ref
A/c Cat Description 3000 0001 Mat Type – Valuation Class
Ref 3001 0001 Mat Type A/c Cat Ref
0001 Raw ROH 0001
Material Valuation Class A/c Cat Ref HALB 0008
0008 Semi- 7900 0008
Finished 7901 0008

9.2.1 Movement Type:

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

➢ Movement types are linked to transaction keys via valuation string in

OMWN T-code.
➢ The value string contains all posting transactions that are possible for a
certaintransaction.
➢ 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.

9.2.2 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 toeach posting transaction.

9.2.3 Account Modifier:

➢ A/c Modifier is used for the transactions for which SAP says there may be
somebusiness 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.

9.2.4 Valuation Group Code:

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

9.2.5 Valuation Area:

It is the entity where we evaluate the material also SAP recommends to use
plantas Valuation Area

9.2.6 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
10.1 Pricing Procedure: Price Determination process in a PO

Purchase Order From the Vendor Master Schema Determination

the system will find the Vendor Purchase Org Pricing
Vendor: ABC Inc.. Vendor Schema group Schema Group Schema group Procedure
Purch Org: 1000 01 01 RM0000
01 02 RM0001
Mat – M001 From the Purchase Org
Plant – 1000 the system will find the
Price – 50.00 Purchase Org Schema
UOM - Kg group
Schema RM0000
SNO Step Conditions ………
10 01 PB00 ………
20 01 RA00 ………
Condition Table 30 01 FRA1 ………
Contract Item

Price – No Record Condition Type: PB00

50Transferr Access Sequence: 0002
ed to PO Plant Info Record
Mat – M001
Plant – 1000
Price – 50.00 Access Sequence: 0002

Condition Tables: Exclusion

1. Contract Item √
2. Plant Info Record √
3. Info Record √
4. …….. √

10.2 Process Steps

10.2.1 Determine the condition tables.
The system determines the condition tables assigned to the
accesssequence and it is nothing but the price element.
a. Determine the condition record (Part I)
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The condition table of access sequence 0002 consists of many

condition records of which contract item has the highest priority. A
system searchyields 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.
10.2.2 Determine the access sequence – 0002.
➢ An access sequence is a search strategy the sap system uses to
search forvalid condition records of a certain condition type.
➢ Condition type PB00 – Assigned to access sequence 0002
10.2.3 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.
10.2.4 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.
10.2.5 Define schema group.
Defining a schema group helps you keep track of this by grouping
togetherthe 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
purchasingorganization.
➢ Assign a vendor schema group in the vendor master record.
10.2.6 Assignment of Schema Group of Vendor, Schema Group Purchasing
Organization and Calculation Schema.
➢ The calculation schema is assigned for a combination of vendor
schemagroup and purchasing organization schema group.
➢ The calculation schema is assigned for a combination of a supplying
plantand purchasing organization schema group.
10.2.7 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 theitems 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 theaccess 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 typePB00).
➢ 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 creditmemo.

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 ofpayment and terms of delivery.
C. Accounting Data
Account name, the account type, the currency in which the
account ismanaged,

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 orderquantity.
C. Material Document
D. A material document is created when a goods receipt is posted. It
includesthe posting date, the quantity delivered, and perhaps also the
delivery notenumber 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. Itdocuments 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
thatyou 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 partof 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, theinvoice quantity remains the same.
11.2.4 Subsequent credit
You have already received a credit memo from your vendor for all the
goodsreceived. 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 orcredit 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 theparked document. Only when you post an invoice or credit memo, does
the system carry out thenormal 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
longerperiod 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
paysthe 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
thatyou are paid back any unauthorized prepayments.
Prepayment is not required for evaluated receipt settlement (ERS) or consignment settlement,
since theinvoices 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
performingprepayment, 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 isrequired
• Posting invoices referring to transactions not yet entered in the system.

11.6 Important Accounts for Invoice Verification

11.6.1 Vendor Account
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not the same as making a payment; payment is only made when the
FinancialAccounting 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
materialis 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
thevendor 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 noposting 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 thecash 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 andthe 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
typicalexample 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
andthe vendor information.
In contrast to invoices with a reference, the system does not display any proposed
valuesfor 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 areaffected 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 followingoptions:
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When you enter an invoice without a reference, you may find that a vendor has not
beencreated 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 systemsince 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 alsoreferred 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, bankdetails, 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 thetax regulations defined by law in the country of the company concerned.
The postingsmade 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
whenan 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 isinvoiced 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.

11.10.1 Four 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
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Invoices for the material are blocked until the inspection has
beensuccessfully 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
purchaseorder)
• Stochastic Block
Manual Block

11.12 Invoice Release (MRBR)

• Releasing Invoices Automatically
(When you release invoices automatically, the system deletes all blocking reasons
that nolonger apply)
• Releasing Invoices Manually
(When you release invoices manually, a list of the blocked invoices that match
yourcriteria appears. In this list, blocking reasons that no longer apply are
highlighted incolor. 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
thedelivery itself. This includes freight charges, customs duty, or other costs.
11.13.1 Planned Delivery Costs
Planned delivery costs are agreed upon with the vendor before the purchase order is
created. Youenter them in the purchase order. (Freight charges, Customs Charges etc.)
Planned delivery costs are automatically posted to clearing accounts at goods receipt. Each
origintype has its own clearing account. When you post the invoice for these delivery costs,
the corresponding clearing accounts are cleared.

11.13.2 Unplanned Delivery Costs

Unplanned delivery costs were not agreed on in the purchase order and
are notentered 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 aseparate 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
receivedfor 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)

11.15.1 Evaluated 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 systemposts the invoice document automatically on the basis of
the data in the purchaseorder 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
orderitem.
• The vendor must be flagged as being subject to ERS in the
vendormaster record.
• Goods-receipt-based Invoice Verification must be defined for
thepurchase order item.
• A tax code must have been maintained in the purchase order
item orPIR should be maintained with TAX.

11.15.2 Consignment 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 anytime, 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 apipeline, 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 thepurchasing information system, because the
purchase order history is not updated during
consignment settlements.

11.15.3 Invoicing plan settlement (MRIS)

An invoicing plan enables us to schedule invoice creation over a series of
futuredue 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.

11.15.4 Revaluation (MRNB)

We use this to determine the difference values on the basis of price changes
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credit memos in different currencies. You can send the revaluation

settlementdocuments 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 youpost 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
creditmemo 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 usingthe 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 - MRA1
Delete Documents - MRA2 Display
Archived Document - MRA3
Manage Archive - 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
consistsof 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
companyintends 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 theBusiness Blueprint.

12.4 Final Preparation

The purpose of this phase is to complete testing, end-user training and cutover
activities tofinalize 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 tolive 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
architectureof 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 Production Client

Testing Client Training 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
Differentsystem/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
thefirst 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
countryspecific changes in different countries.
14.1.4 SAP Up gradation Project
Customers are moving from the older versions to new versions. It is
called asSAP Migration Projects.

14.2 Testing Methods in SAP Projects:

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

Thistests alone pieces of functionality.
14.2.2 Security Testing
Security testing ensures the SAP security roles and authorization roles
providedbased on the requirements.
14.2.3 Integration Testing
It is testing of SAP transactions (for example, MM is integrated with SD)
youneed to test all MM & SD Transactions accordingly.
14.2.4 User Acceptance Testing (UAT)
User Acceptance testing is conducted by a group of business end users to
validatethat the new developed SAP system meets all requirements.
14.2.5 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 so-called Test Scripts which indicates all testing steps that
testers shall have to complete.

15 Types of Calls/Tickets & SLA

15.1 Types of Calls:
A. Incidents (Bugs in Productions System)
B. Change Request (Configuration and Development activities)
C. Problem Tickets (Investigation of Re-accruing incidents and problems)
D. 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 SLA for Incidents:

A. Critical Incidents – P1 Incidents – 4 Clock Hours
B. High Priority Incidents – P2 Incidents – 2 Business days
C. Medium Priority Incidents – P3 Incidents – 5 Business days
D. Low Priority Incidents – P4 Incidents – 10 Business
days

15.4 SLA for Change Request:

A. Major Change Request – 90 Days
B. Medium Change Request – 60 Days
C. Minor Change Request – 30 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 datais 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
datafrom/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 datacalled 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
assignedexplicitly 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
modelthat 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 canexchange 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 asPORDCRI (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
(Onwhat 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 SAPdatabase, which is processed immediately).
• Trigger immediately (In this case, the adapter waits for the SAP system to
processIDocs. 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
(ToAccept 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 asBUPA_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

typeBUPA_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
avendor for PRP System).
➢ Once we create PO in PRP (ERP System) then Sales order is created to vendor VUS01SO
(PRDPlant) 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
ismaintained 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
vendorVUS01SO output type NEU triggers and creates Sales order in PRD.
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