sap mm complete

7/30/2019 sap mm complete

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TATA CONSULTANCY SERVIES

CONTENTS

MM - Overview

MM - Purchasing

MM - Purchase Order

MM - Inventory Management

MM - Invoice Verification


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Overviewof

MATERIALS MANAGEMENT


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Target Group

Purchase department

Stores department


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Course Objectives

Visualize the MM functionalities

Maintain MM related views of Material

Master and vendor master

Create other master records or changingthe existing master records

On conclusion of this course, you should beable to:


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MM - Overview

Major components of MM- Module materials planning and control

purchasing

inventory management

invoice verification.


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Integration with other Modules

Finance / Asset ManagementFinance / Asset Management

ProcurementProcurement

Logistics PlanningLogistics Planning

Sales LogisticsSales Logistics

ProductionProduction


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SDSD

FIFI

Integrated Business Process Overview

Requirementfor Goods /

Services

Requirementfor Goods /

Services

Purchase

Order

Purchase

Order

Goods

Receipt

Goods

Receipt

Invoice

Verification

Invoice

Verification

Financial and Managerial Reporting and AnalysisFinancial and Managerial Reporting and Analysis

G/LInventory /

GRIR

G/LInventory /

GRIR

G/L GRIR/Expense

AP Invoice

G/L GRIR/Expense

AP Invoice

Vendor

Payment

Vendor

Payment


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Organizational Elements - Client

Highest Hierarchical Level in SAP(e.g. a corporation)

Can be Used to Differentiate between a Development,Quality Assurance, and Production System within R/3

All Areas of an Organization that are to be Integratedinto the SAP R/3 Production System should be IncludedUnder one Client

Client CharacteristicsClient Characteristics


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Organizational Elements - MM

Usually a Manufacturing Facility, Warehouse, or aLocation that Stocks , Manages, and ValuatesInventory

May be a Physical Site with MultipleManufacturing/Production Lines

May be Multiple Manufacturing/Production Lines atOne Physical Site

Can be a Physical Location(cost centers may ormay not be associated to a plant i.e. administrativeVs. manufacturing cost centers)

SD Availability Checking is Normally Done at thePlant Level

PlantPlant


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Links to Production (PP), Materials Management(MM), and Sales and Distribution (SD)

A Plant is Assigned to A Company Purchasing Organization are Assigned to Plants

Plant (Cont.)Plant (Cont.)


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A Location within a Plant where Inventory isStored

Storage LocationStorage Location


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Master data in MM

Material Master

Vendor Master

Service Master

Purchasing info record

Source List

Vendor Excise Details

Material and Chapter ID combination Excise Tax rate


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Material master in SAP.

The material master contains information on all thematerials that a company procures, produces, stores,and sells.

The material master is used by all components in the

SAP Logistics System Different departments in a company work with the

same material, so data in a material master record issubdivided in the form of user departments.

Material description and Base unit of measure appearin all user departments.


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Use of material master in SAP logistics systemfunctions.

In Purchasing for ordering materials.

In Inventory Management for goods movementpostings and physical inventory

In Invoice Verification for posting invoices

In FI for maintaining value of material.

In Production Planning and Control for material

requirements planning, scheduling, and workscheduling


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User departments using same material master


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Material Numbers

Definition Number uniquely identifying a material master record,

and thus a material.

Use

For every material that your company uses, you mustcreate a material master record in the material master.This record is uniquely identified by a material number.

Internal and External number assignment.


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Industry sector

It determines type of industry . Eg. mechanical industry,chemical

industry,pharmaceutical etc.

The industry sector you specify determines

Which screens appear and in what sequence

Which industry-specific fields appear on the individualscreens


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Material Types

Materials with the same basic attributes are groupedtogether and assigned to a material type.

When creating a material master record, you mustassign the material to a material type. The material type

determines certain attributes of the material and hasimportant control functions.

Some of the standard material types are

ROH: Raw materials which are bought from outside and goes

into production. Halb :Semi-finished material which are bought externally and

manufactured inside. They can be sold individually as well.

FERT:Finished materials are final products of the company


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Views relevant to MM

Basic data1

Purchasing Purchase order text

Storage 1

Storage 2


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CREATING MATERIAL MASTER IN SAP

From logistics screen click Logistics Materials Management material master, to

bring up material master screen.

Click material create(general) immediately

Organizational levels.

Plant

Storage location


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Material master

In Purchasing screen you can enter Purchasing group

purchasing value key

Set indicator for automatic PO


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Material master

In purchase order text screen, you can enter the text , which will be defaulted in PO

every time when you create a PO for this material.

In Storage 1 you can enter,

Storage bin

Unit of issue

Shelf life data

Batch management


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Concept of vendor master in SAP.

vendor master record is maintained by both Accounting andPurchasing.

A vendor can be a one time vendor or regular vendor

A vendor master record contains the vendors name andaddress, as well as data such as:

the currency used for ordering from the vendor

terms of payment names of important contact persons (sales staff)


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Organization of vendor master records

A vendor master record is subdivided into threedifferent data areas:

General Data

Company code data

Purchasing organization data


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Creating vendor master record.

Menu Path Logistics -> Material management -> purchasing ->master

data vendor ->purchasing ->create

In the initial screen you can enter,

Vendor number (For External number assignment )

Vendor account group

Purchasing organization


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Creating vendor master record.

In general data you can maintain, Address

Control

Payment transactions

In Purchasing organization data you can maintain,

Purchasing Data

Partner functions


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Changing vendor master record

You cannot change Vendor account group (One timevendor cannot be converted in to a regular vendor)

Blocking a vendor

Flag for deletion

Changing other options

Automatic PO

Vendor schema group

Payment terms

Discount


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Service Master Records

Descriptions of all services that may need to beprocured can be stored.

The organizational level at which services are procuredis the purchasing organization.

In addition to a unique description of the service, aservice master record contains further information thatis necessary for procurement purposes (such as texts

or units of measure).


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Service master records

You can store price information at various levels: forexample, $100 per hour as the "market" or "ownestimated" price, $98 as vendor Acmes price and $105as vendor Zeniths price for service A.

The individual service master records can be groupedinto different service types (e.g. trades or activities).


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Creating a service master record

In the initial screen you can enter Service number (if external number assignment)

Service category

In the Basic data screen enter, Base unit of measure

Description of services

Valuation class (3200 for services)

In the classification screen enter,

The class for classifying the services


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Concept of Purchasing info rec in SAP.

An info record represents a material-vendorrelationship.

The info record contains concise information about a

vendor and a material that you already procure fromthat vendor.

Info records are created automatically when you order

a material. You can also create, change, and delete inforecords.


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Purchasing info rec (Contd)

Use of Purchasing info rec in PO creation Net price for the item will be defaulted in PO

All the pricing conditions will be defaulted

other uses include

Remainders

Delivery tolerance

Shelf life

Purchase order text


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Purchasing info rec (Contd)

Use of info rec in Vendor evaluation

Order price history

Quotation price history Delivery reliability

Quantity reliability


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Concept of source list in SAP

A source list specifies the possible sources of supplyfor a material over a given period of time

It shows the time period in which a material may be

ordered from a given vendor

Source list can be created automatically using generatesource list option

Source list can also be maintained manually.


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Source List (Contd)

Uses of source list Fixed vendor

Vendor blocking

Auto PO creation

Source list requirement at plant level

Can be made mandatory


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Master Data for India Version

Chapter ID Excise Law

Chapters, Headings and subheadings

Example 7216.10

72 - Iron and Steel

16 - Angles, shapes and sections

Material and Chapter ID combination

Material assessable value Net dealer price

Material assessable value


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Tables for excise purpose (contd..)

MODVAT Determination Input material MODVAT

output material MODVAT

Vendor Excise details

SSI Rates

Excise Tax rates


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MM - Purchasing


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Target Group

Purchase department


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Course Objectives

Understand the concepts in SAP -Purchasing component

Create or change PRs

Create, change or compare RFQs

Create contracts

On conclusion of this course you shouldbe able to


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Introduction

Contents Purchasing overview

Purchase requisitions

Request for quotations

Outline agreements

Exercises

Solutions


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Purchasing - overview

The Purchasing component has the following tasks: external procurement of materials and services

determination of possible sources of supply for a requirementidentified by the materials planning and control system

determination of possible sources of supply for a requirement arisingdirectly within a user department

monitoring of deliveries and payments to vendors


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Purchasing - integration with other modules

Integration Controlling (CO)

Purchase orders for materials intended for direct consumption

They can be directly assigned to a cost center or a production

order. Financial Accounting (FI)

Vendor master is maintained by both accounting and purchasingdepartments.

Through PO account assignment, Purchasing can also specifywhich G/L accounts are to be charged in the financial accountingsystem.


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Purchasing - integration with other modules

Sales and Distribution (SD) Within the framework of materials planning and control, a

requirement that has arisen in the Sales area can be passed onto Purchasing.

When a requisition is created, it can be directly assigned to a

sales order.


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Process flow in purchasing

Determination of Requirements Materials requirements are identified either in the user departments

or via materials planning and control.

It includes both MRP proper and the demand-based approach toinventory control.

The regular checking of stock levels of materials defined by masterrecords, use of the order-point method, and forecasting on the basisof past usage are important aspects of the demand management.

You can enter purchase requisitions yourself, or they can begenerated automatically by the materials planning and controlsystem.


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Source Determination The Purchasing component helps in identifying potential sources of

supply based on past orders and existing longer-term purchaseagreements.

This speeds the process of creating requests for quotation (RFQs)

Vendor Selection and Comparison of Quotations

The system is capable of simulating pricing scenarios, allowing you tocompare a number of different quotations.

Rejection letters can be sent automatically.


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Purchase Order Processing The Purchasing system adopts information from the requisition and

the quotation to help you create a purchase order.

You can generate Pos yourself or have the system generate themautomatically.

Vendor scheduling agreements and contracts are also supported.

Purchase Order Follow-Up

The system checks the reminder periods you have specified

System automatically prints reminders or expediters at the predefinedintervals.

It provides you with an up-to-date status of all purchase requisitions,quotations, and purchase orders.


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Goods Receiving and Inventory Management Goods Receiving personnel can confirm the receipt of goods simply

by entering the Po number.

By specifying permissible tolerances, buyers can limit over- andunderdeliveries of ordered goods.

Invoice Verification

The system supports the checking and matching of invoices.

Invoice verification can be based on purchase orders or GRdocuments or directly to a vendor without any document

reference.


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Std. Menu options in Purchasing

Create Use this option to create a purchasing document .

Enter the required information and save the document .

The document is then stored under a unique number.

Change

Use this option to change a purchasing document .

You need the document number in order to access the document.


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Display Use this option to display a purchasing document .

You cannot change or add any information to the document that isdisplayed .

You need the document number in order to access the document. List displays/reporting

You can use these options to generate reports analyzing purchasingdocuments

Example List of all purchase orders for Vendor ABC


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Follow-on functions This option allows you to perform tasks related to (following on from)

but not included in the purchasing functionality.

Example

Entering a goods receipt or an invoice in the system.

Messages

This option enables you to print or transmit documents in messageform

Example Transmission via fax, Printouts etc


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Purchasing Documents

Definition A purchasing document is an instrument used by Purchasing to

procure materials or services.

Types of purchasing documents

Request for quotation (RFQ)

Transmits a requirement defined in a requisition for a material orservice to potential vendors .

Quotation

Contains a vendor's prices and conditions

It is the basis for vendor selection.


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Purchasing Documents

Purchase order (PO) The buying entitys request or instruction to a vendor (external

supplier) to supply certain materials or render/perform certainservices/works,

It formalises a purchase transaction .

Contract

In the SAP Purchasing component, a type of "outline agreement", orlonger-term buying arrangement .

The contract is a binding commitment to procure a certain material or

service from a vendor over a certain period of time.


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Purchasing documents

Structure Each purchasing document is subdivided into two main areas:

The header

The header contains information relevant to the whole document .

Example, information about the vendor and the document number iscontained in the document header

The individual items .

The items specify the materials or services to be procured .

Example, The material description and the order quantity are

specified in each item.


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The additional data It provides extra information about the item, and has no direct

connection with the item procurement data.

Example,

account assignment data

PO history for an item, which contains information on alreadyrecorded goods and invoice receipts relating to the item.

Classification of Purchasing Documents

Purchasing documents are differentiated in the SAP system via the

document type . Example, relevant number range depends on document types


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Document types are defined for RFQs, purchase orders, andcontracts

Numbering of purchasing documents

Each document is assigned a unique number .

This number can be assigned internally or externally , depending onthe policy .

Internal number assignment means that the system assigns thenumber.

External number assignment means that the person creating the

document must supply it. Alphanumeric assignment is only possible in the latter case.


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Definition A purchase requisition is a request or instruction to Purchasing to

procure a certain quantity of a material so that it is available at acertain point in time.

It is an internal document.

Requisitions can be created in the following ways:

Directly: Someone from the requesting department enters a purchaserequisition manually.

Indirectly: The purchase requisition is created via another SAP

component.

Purchase requisitions can be subject to a releaseprocedure.


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Purchase requisitions - integration

Requisitions can be created indirectly in the followingways:

via materials planning and control

The component Consumption-Based Planning suggestsmaterials that need to be ordered on the basis of pastconsumption or usage figures and existing stock levels.

The order quantity and the delivery date are determinedautomatically.

Materials planning and control can stipulate that a purchase

requisition is to be resubmitted to the purchasing department if ithas not been processed after a predefined period of time.


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Purchase requisitions - integration

Requisitions are generated automatically fromproduction orders if

They contain an external processing operation (e.g. subcontractingwork)

A precondition is that the control key for the operation allows orprescribes external processing.

they contain non-stock components


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Procurement types Standard

Subcontracting

Components to be provided can be entered.

Consignment

Stock transfer

External service

Service specifications can be entered


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Manual creation of PR

Things to remember Item category

Account assignment category


Purchasing group

Requirement tracking number

Delivery date

Item with or with out material master record

Order quantity

C Q


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Creating Request For Quotation

Automatically from PR

Manually

With reference to PR

With out reference to PR

Delivery address

Address of the company asking for quotation, by default it is theaddress of E+L. But it can be changed.

vendor address

Just enter the codes of the vendor, System will take other detailsfrom vendor master.

Quotation dead line

Delivery date

RFQ ( d )


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RFQ (contd)

Printing RFQ

Send the Printed RFQ to the vendors

Receive the quotation from the vendor

Maintain the RFQ Enter the net price quoted by the vendor

Enter the pricing conditions

Terms of payment

Update the info record if reqd

Q t ti


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Quotations

Compare the quotations Maintain the collective number in the RFQs

Quotations can be compared based on price

Discounts and delivery costs can be included

Comparison can be based on effective price also

System compares and gives the ranking list

Percentage basis for comparing quotations

Mean value equals 100%

Maximum value equals 100%

Minimum value equals 100%

O tli t ith th d


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Outline agreements with the vendor

To Setup longer-term purchasing arrangements withvendors regarding the supply of materials or theperformance of services.

Outline agreements can be subject to a release(approval or clearance) procedure.

Agreement types

Quantity contract

Value contract

O tli t


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Outline agreements

Structure Document header: containing information relating to the entire

agreement. For example, the vendor information and headerconditions are in the document header

Items: containing the information specific to the relevant material or

service. statistics on ordering activities for the item

quantity or price of the item

conditions, such as quantity discounts and surcharges

O tli t


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Outline agreements

Texts in Outline Agreements Header texts

Item texts

You can create your own text types

Creating a outline agreement

Outline agreement can be created with reference to a RFQ or withoutany reference

Important terms


Purchase group

O tli t


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Outline agreements

Target quantity Target Value

Pricing conditions

Validity starting and ending date

Vendor address

Delivery address

Remainders


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MM - PURCHASING

T t G


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Target Group

Purchase department

Co rse Objecti es


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Course Objectives

Create a new PO

Make changes to existing PO

Print PO

Navigate through purchasing informationsystem

On conclusion of this course, you should beable to

Introduction


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Introduction

Contents Creating POs

Printing of POs

Printing Remainders

Changing or canceling POs

Purchasing information

Exercises

Solutions

Purchase order


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Purchase order

Definition Formal request or instruction from a purchasing organization to a

vendor or a plant to supply or provide a certain quantity of goods orservices at or by a certain point in time.

Structure

Header

items

Additional data

Creating a Purchase order


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Creating a Purchase order

Automatically from PR Set automatic PO indicator for material and vendor

Maintain Purchasing info record

Maintain source list

Fixed vendor

PR from MRP or Manually created PR

Assign manually or automatically

Process the assigned PR to create PO

Create PO Manually


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Create PO - Manually

Manually creating a PO With reference to PR

Select the PRs

Select the items from PR

Copy the items in to PO

Enter the vendor

Enter the prices and pricing conditions


Update the info record if reqd

Create PO


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Create PO

With reference to RFQ

Select RFQ

Select the items

Copy the selected items in to PO

Enter the Price and pricing conditions

Update the info record if reqd.

Acknowledgement and confirmations

Create PO


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Create PO

With out any reference

In this case you need to enter

Vendor code

Delivery date

Item category

Account assignment category (if reqd)


Order type ( NB For std purchase order)

Plant ( 4000 - default plant )

Storage location

Creating a PO (contd )


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Creating a PO (contd)

Important terms in PO Vendor

For creating a PO you need to enter vendor code

Vendor master should exist for this purpose

if you dont want to maintain all the details for a vendor you cancreate a one time vendor

Item category

Standard

Subcontracting

service

Create PO (Contd )


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Create PO (Contd)

Account assignment category

Specification of the account assignment objects that are chargedin the case of a purchase order for a material that is intended fordirect usage or consumption.

Examples

Asset

Sales order

Production order

Cost center

Types of account assignment Single account assignment

Multiple account assignment

Create PO (contd )


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Create PO (contd)

Delivery date

Date format

Day format

Week format

Month format

Delivery date entered here is only expected delivery date

You can also specify a statistical delivery date

Create PO (contd )


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Create PO (contd)

Units of measure in PO

The order unit

This is the unit you specify in connection with the order quantity.

The order price unit

This is the unit that applies in connection with the net price and which is

taken as the basis for invoice verification. If the order price unit does not correspond to the order unit, and if no

conversion factor is specified in the system, you must enter a conversionfactor on the item detail screen.

Create PO (Contd )


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Create PO (Contd)

Example for units of measure in PO Order quantity 24

Order unit Box

Gross price per unit $10

Order price unit (number) 1

Order price unit (of measure) kg

Conversion factor 24 boxes 1 kg

Create PO (Contd )


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Create PO (Contd)

Conditions

This component enables you to store pricing stipulations agreedwith the vendor

Examples are applicable discounts or surcharges, or stipulationsregarding the payment of freight costs in the system.

There are three kinds of price in Purchasing:

Gross price

Price without taking any possible discounts and surcharges into account

Create PO (Contd )


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Create PO (Contd)

Net price

Price taking any applicable discounts and surcharges into account

Effective price

Net price after deduction of cash discount, with allowance for anymiscellaneous provisions, delivery costs, and non-deductible taxes.

Terms of Payment

Example

Within 14 days 2% discount

Within 30 days due net

Create PO (Contd )


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Create PO (Contd)

Inco terms

Incoterms are internationally-recognized terms of deliveryreflecting the standards set by the International Chamber ofCommerce (ICC).

Example

FOB - Free On Board. This means that the buyer has to bear allcosts and risks of loss of or damage to the goods from that point.

You can specify Incoterms for an order item that differ from those inthe PO header.

Creating PO from outline agreement


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Creating PO from outline agreement

In the initial screen for Create PO, Select the Outline agreement and items

Copy the items in PO

In the item overview screen

Enter the quantity

If the quantity exceeds the target quantity system gives a warning

Texts in PO


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Texts in PO

Header texts Header note

Pricing types

Dead lines

Terms of delivery

Shipping instructions

Terms of payments

warranties

Penalties for breach of contract

Confirmations


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Confirmations

Purpose This component can be used, if you wish to have your vendor provide

you with various kinds of confirmation regarding delivery dates andquantities

It enables you to base your materials planning and control activities

on more up-to-date data than that contained in purchase orders.

Confirmation control key

Shipping notification

Order acknowledgement



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Shipping Notification Definition

A vendors confirmation to a purchasing organization of the deliverydate for a certain quantity of ordered materials

It can be for the date of performance of ordered services also.

Structure

A shipping notification consists of several items in which the notified(confirmed) quantity of the material or service is specified.

Confirmations from the Viewpoint of IM


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When you post goods receipts, there are several waysof finding the associated purchase orders.

Enter the PO number

Enter the shipping notification number

Enter the transport identification code

If you establish a link via the PO number itself, therelationship is unique

i.e. one goods receipt (GR) against one purchase order



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If you enter the number of the shipping notification The system selects all purchase orders containing this number

System suggests the notified quantities for the GR document.

Prerequisites

If you wish to match up GRs against POs via the shipping notificationnumber ,

shipping notification must exist as a separate document.

Releasing the PO


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Releasing the PO

Release Procedure for External Purchasing Documents External purchasing documents (i.e. purchasing documents other

than requisitions) are released at header level.

Item-by-item release is not possible.

These documents can only be released using the release procedurewith classification.

Release Conditions

The release conditions determine the release strategy in accordancewith which a PO is to be released.

If a PO does not meet the conditions for a release strategy, it isautomatically released for further processing.

Release procedure


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Release procedure

Release Strategy The release strategy defines the approval process for purchasing

documents.

The strategy specifies the release codes necessary and thesequence in which releases have to be effected.

A maximum of eight release codes can be defined.

The assignment of the release strategy to a purchasing document isbased on the release conditions.

Release procedure


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e ease p ocedu e

Release Code Definition

The release code is a two-character ID allowing a person torelease (clear, or approve) an external purchasing document.

Who may work with which release codes is basically controlledvia a system of authorizations.

Release Prerequisites

The release prerequisites indicate the sequence in which PO must beapproved via the release codes.

Printing a PO


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g

Menu path Purchase order -> Header -> Messages

Data required

Output type

Medium

Communication method

Select the printer

Further Data

Repeat output

Change output

Printing the remainders


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g

Types of expediting letters Remainders

A negative number of days means that a reminder is to be issuedto the vendor n days prior to the delivery date

Urging letters

A positive number of days means that a letter or message urgingdelivery is to be issued n days after the due date.

Message type - MAHN (Dunning letter)

Changing and blocking POs


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g g g

If you change a PO after it has been sent to the vendor, a changedocument is generated that can be sent to the vendor.

This tells the vendor what you have changed.

If the goods have already been delivered, then the changes you canmake to the PO are limited.

For example, you cannot change the quantity to one that is lessthan the quantity delivered.

If the invoice has been received or the goods have been paid for, andyour intended change affects the price, the change will be ineffective.

You can display the PO history for an item to determine whether

deliveries have been received or the item has been invoiced.



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g

List displays List of POs for a vendor or for a range of vendors

This gives the details of the purchase order like still to bedelivered, still to be invoiced etc.

List of POs for a material or for a range of materials

List of POs for a account assignment

List of POs for a requirement tracking number

Reporting

General analyses Order value analyses

Subcontracting stocks per vendor



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g

Material Purchasing values

Purchasing quantities

On time delivery

Qty reliability Frequencies

Vendor

Material group

Purchasing group


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MM - Inventory management

Target Group


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g p

Purchase department Stores department

Course Objectives


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j

Do planned and unplanned goods receipts

Do Issue of Goods

Do transfer posting of goods

Manage stocks of the company on bothquantity and value basis

On conclusion of this course, youshould be able to

Introduction


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Contents

Overview

Integration with other modules

Type of stocks

Concept of material documents

Goods movements

Movement type concept

Inventory management - overview


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What is inventory management ?


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SAP's Inventory Management system allows you to

manage your stocks on a quantity and value basis

The stocks are managed not only on a quantity basis but also byvalue - a prerequisite for cost accounting. With every goodsmovement, the following values are updated:

the stock value for inventory management the account assignment for cost accounting

the corresponding G/L accounts for financial accounting via automaticaccount assignment

What is inventory management ?


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Planning, Entry, and Proof of Goods Movements

Goods movements include

external movements (goods receipts from external procurement,goods issues for sales orders)

internal movements (goods receipts from production, withdrawals ofmaterial for internal purposes, stock transfers, and transfer postings).

For each goods movement a document is created which is used bythe system to update quantities and values and serves as proof ofgoods movements.



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Integration in Materials Management (MM)

As a component of Materials Management, Inventory Management isdirectly linked with Material Requirements Planning , Purchasing, andInvoice Verification.

Inventory Management forms the basis for material requirements

planning, which takes into account not only physical stocks but alsoplanned movements (requirements, receipts).

Quantities and values from the purchase order and the goods receiptdocument are checked to ensure conformity with those in the invoice.



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Integration in Production Planning (PP)

Inventory Management is closely linked to the Production Planningmodule:

Inventory Management is responsible for staging of the componentsrequired for production orders

Goods issue against production orders

The receipt of the finished products into the warehouse is posted inInventory Management.



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Integration in Sales & Distribution (SD)

As soon as you enter a sales order, you can initiate a dynamicavailability check of stocks on hand.

When the delivery is created, the quantity to be delivered is markedas "Scheduled for delivery."It is deducted from the total stock when

the goods issue is posted. It is also possible to create sales order stocks.

These SD transactions are depicted in the Sales & Distributionsystem.



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Integration in Quality Management (QM)

In the case of a goods movement, the system determines whetherthe material is subject to an inspection operation.

If so, a corresponding activity is initiated for the movement in theQuality Management system.

Financial Accounting (FI)

Automatic account assignment, a procedure during which the systemdetermines the accounts relevant for the given goods movements.



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Controlling (CO)

The interface to the cost accounting system is activated in thecase of material consumption

For example, when materials are issued for various accountassignment objects such as orders or cost centers.

Cost accounting is also involved when goods receipts areassigned directly to cost centers or orders.

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Relevant views

Accounting

Price and accounting information.

Examples:

type of price control valuation class.

Materials Planning

Information for materials planning.

Examples: safety stock, reorder level, availability check.



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Purchasing

Procurement information for a material.

Examples:

overdelivery and underdelivery tolerances

purchasing order unit of measure (order unit).

Storage Information for warehousing and storing the material.

Example:

unit of issue

storage conditions, fixed bin location



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Quality Management

Information for sampling and inspecting a material.

Examples:

indicator for goods receipt via quality inspection

Work Scheduling

Information for producing the material.

Examples:

production unit

overdelivery and underdelivery tolerances allowed.

IM - Data Required


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For Inventory Management, you must maintain thefollowing data:

Plant data

This data can be maintained via different views (for example, viaPurchasing, Storage, Work scheduling).

You have to maintain at least one view that requires the entry ofthe organizational level plant.

Valuation data

Valuation data is required for managing the stock by value.

You maintain this data via the Accounting view.

IM - Data Required


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Storage location data

You maintain the storage location data via the Storage view.

If a material is located in a storage location, the storage data forthat storage location must exist in the material master record, sothat the system can manage the stock quantities at storage-location level.

Storage data can be manually entered when the material masterrecord is created

It can be automatically created during the first goods movement inthat storage location.

Types of stocks


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Total valuated stock

Sum of all valuated stocks of a material.

It consists of all the types of stock your company owns.

Unrestricted-use stock

Company's own stock that is physically located in the warehouse,valuated, and not subject to any kind of usage restrictions.

quality inspection stock

Company's own stock that is in quality inspection.

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Stock in quality inspection is valuated but does not count as

unrestricted-use stock.

For MRP, it is either available or not available, depending on how thesystem is set.

Blocked stock

Company's own stock that should not be used.

It does not count as unrestricted-use stock for Inventory Management

It is usually not available for MRP.

Types of stocks


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Restricted-use stock

Valuated stock of a material managed in batches held by a company(and belonging to that company)

Usage of this stock is subject to certain restrictions. This category ofstock is only used when batch status management is active.

Blocked stock returns

Stock that was returned by the customer and conditionally accepted.

It is neither valuated nor does it count as unrestricted-use stock.

Types of stocks


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stock in transfer

Quantity that was already withdrawn from stock at the issuinglocation but that has not yet arrived at the receiving location

Stock in transfer is managed in the valuated stock of the receivinglocation, but it does not yet count as unrestricted-use stock.

Stock in transit

Stock in transfer that is created in the case of a stock transfer via astock transport order.

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Available stock

Dynamic stock that is calculated by MRP taking any receipts, issues,the current available stocks into account.

Which requirements, receipts, and issues are included in theavailability check is defined in the Customizing system.

Reserved stock

Sum of all quantities of a material that are reserved for withdrawal.

Reserved stock is usually not available from the point of view of MRP

For Inventory Management it still counts as unrestricted-use stock.

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Planned receipts

Sum of all quantities whose receipt has been planned withreservations.

Planned receipts are usually already available from the point of viewof MRP

For Inventory Management they do not yet count as unrestricted-usestock.

Open PO quantity (total)

Sum of all outstanding PO quantities for a material.

The open PO quantity usually increases available stock in MRP

It does not increase unrestricted-use stock in Inventory Management.

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Open order quantity (total)

Sum of all outstanding order quantities for a material.

The open order quantity usually increases available stock in MRP

It does not increase unrestricted-use stock in Inventory Management

Goods receipt blocked stock Sum of all quantities of a material that were delivered by vendors for

purchase orders and that have been conditionally accepted.

GR blocked stock is neither valuated nor does it count asunrestricted-use

Types of stocks


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Stock scheduled for delivery

Sum of all current deliveries to customers for which goods issueshave not yet been posted.

Like reserved stock, stock scheduled for delivery is usually notavailable from the point of view of MRP

It counts as unrestricted-use stock for Inventory Management.

Negative stocks

Negative stocks are required if, for example, goods issues areentered before the corresponding goods receipts for organizational

reasons and the material is already physically located in thewarehouse.

Batch management


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With batch handling, you can manage not onlyproduction lots from in-house production, but alsoproduction lots from vendors as separate entities.

Before you can manage batches of a material in stock,you must first specify in the material master record that

the material is to be managed in batches for thespecified plant.

To do this, you must set the batch managementrequirement indicator in the material master record

At the time of goods receipt system will allocate thebatch number

Goods movements


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Definition of Goods Movement

A goods movement is an event that causes a change in stock.

Good receipt

A goods receipt (GR) is a goods movement with which the receipt ofgoods from a vendor or from production is posted.

Goods issue

A goods issue (GI) is a goods movement with which a materialconsumption, or a shipment of goods to a customer is posted.

Goods movements


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Stock Transfer

Transfer of material from one plant to other plant or from one storagelocation to other storage location

Transfer Posting

changes in stock type or stock category of a material.

Examples of transfer postings are:

Transfer Postings From Material to Material

Release from quality inspection stock

Transfer of consignment material into company's own stock

The document concept


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When posting a goods movement in the SAP System,the following documents are created:

Material document

a material document is generated that serves as proof of themovement

Accounting document

If the movement is relevant for Financial Accounting anaccounting document is created

Cost accounting Document

Movement types


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Movement Type

When you enter a goods movement in the system, you must enter amovement type to differentiate between the various goodsmovements.

A movement type is a three-digit identification key for a goods

movement. Examples

Goods receipt for a purchase order 101

Goods issue for a cost center 201

Release from quality inspection stock 321

Movement types


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Control Functions of the Movement Type

The movement type has important control functions in InventoryManagement.

For example, the movement type plays an important role in

updating of quantity fields

updating of stock and consumption accounts

determining which fields are displayed during entry of a document inthe system

Material documents


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Changing a Material Document

you can not change a document once it has been posted.

If you made a typing error when entering a goods movement youmust reverse the movement with a reversal document

Although you cannot change a posted document, you can use the

function "Change Material Document" to

enter additional information for the document.

print a goods receipt/issue slip for the document

Planning goods receipts


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Referencing Document During Entry of GoodsMovement

The documents used to plan goods receipts serve as referencedocuments for entering the goods movement

GR for purchase order


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Return Deliveries


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When you enter the return delivery, you shouldreference the purchase order or the material document,so that the system can

suggest data (for example, the storage location), to simplify datainput

perform certain checks (the returned quantity must not exceed thedelivered quantity)

reduce the quantity delivered to-date

reverse other updates that occurred (for example, for goods receiptinto consumption) when the goods receipt was entered

Shelf Life Expiration Date Check


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When you enter a goods receipt, it is possible to checkthe shelf life of a material.

Prerequisites

The shelf life is only checked if the following prerequisites are met:

The minimum remaining shelf life is maintained in the materialmaster record or in the purchase order.

The minimum remaining shelf life is the minimum number of days forwhich the material must keep for the goods receipt to be accepted bythe system.

.

Other goods receipts


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initial entry of stock balances

external goods receipts without a purchase order

internal goods receipts without a production order

goods receipts of by-products

deliveries free of charge

returns from the customer

Reservations


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Goods issue for an order


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Results of a Goods Issue Posting


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A goods issue has the following results in the system:

material document is created

accounting document is created

Creation of a Goods Receipt/Issue Slip

Stock Update

Update of G/L Accounts

Consumption Update

Reservation Update

Order Update

Printing documents


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MM - INVOICE VERIFICATION

Target Group


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Purchase department

Stores department

Finance department

Course Objectives


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Enter and verify vendors invoice

Enter and verify vendors excise invoice

Devalue materials

Carry out physical inventory

On conclusion of this course, you should beable to

Introduction


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Contents

Invoice entry and verification

Credit memo

Excise invoice

Material devaluation

Physical inventory

Inventory management information

Exercises

Solutions

MM - invoice verification


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Invoice Verification in Materials Management serves

the following purposes:

It completes the materials procurement process

It allows invoices that do not originate in materials procurement (forexample, services, expenses, course costs, etc.) to be processed

It allows credit memos to be processed, either as invoicecancellations or discounts

Invoice Verification does not handle the payment or theanalysis of invoices.

The information required for these processes is passedon to A/C department.

Invoice verification


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Invoice Verification tasks include:

Entering invoices and credit memos that have been received

Checking the accuracy of invoices with respect to contents,prices, and arithmetic

Executing the account postings resulting from an invoice

Updating certain data in the SAP system, for example, openitems and material prices

Checking invoices that were blocked because they varied toogreatly from the purchase order

Types of Invoice Verification


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As a rule, an invoice refers to a transaction for which

the issuing party requests payment.

Invoice Verification differs depending on the type ofinvoice involved:

Invoices based on purchase orders

With purchase-order-based Invoice Verification, all the items of apurchase order can be settled together,

Invoices based on goods receipt

With goods-receipt-based Invoice Verification, each individual

goods receipt is invoiced separately.

Types of Invoice Verification


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Invoices without an order reference

When there is no reference to a purchase order, it is possible topost the transaction directly to

a material account

a G/L account

or an asset account.


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Screens for Invoice Verification


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The initial screen

This contains general data such as

company code

currency

invoice reference.

The vendor screen

This contains data on the vendor

The terms of payment

taxes.


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Parking the invoice


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The preliminary posting function can be of great

advantage if:

You are interrupted when entering an invoice. You can park thedocument and continue processing it later on. This saves you timehaving to enter the data twice.

You wish to clear up some questions before you post an invoice. You

can park the document and continue processing it later on.

You wish to split the Invoice Verification process. One employee can,for example, park an invoice without checking it, while another carriesout the actual checks and posts the document after making anynecessary corrections.

Data Update When Posting an Invoice


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When you post an invoice, the system carries out the

account movements and updates the following

The system generates a Financial Accounting document that displaysthe accounts involved in the posting and the amounts posted to theseaccounts.

The system creates a purchase order statistic for each item in thepurchase order.

The moving average price is updated in the material master record Ifthe invoiced price differs from the price in the purchase order for amaterial with moving average price control


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Credit memos


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The term credit memo always refers to a credit memo

from the vendor.

Posting a credit memo always leads to a debit postingto the vendor account.

Two types of credit memos are possible:

Credit memos that refer to a purchase order or goods receipt

Credit memos that do not refer to a transaction.

Processing of credit memos is same as invoice

verification

Types of Delivery Costs


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In the SAP System, there are two types of deliverycosts:

Planned delivery costs

They are entered in the purchase order. Provisions are set up for therelevant costs at goods receipt. The delivery costs posted at goodsreceipt can be referenced at invoice entry.

Unplanned delivery costs

They are only entered when the invoice is entered. No provision ismade at goods receipt.


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Lowest value determination


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Methods

In the SAP System there are various methods of determining tax orcommercial prices:

lowest value determination based on current market prices

system searches for the lowest price from among the various prices

stored for each material. lowest value determination based on rate of movement

lowest value determination based on range of coverage

Range of coverage = average stock : average consumption

Lowest value determination


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Calculating the Movement Rate

Movement rate = Total quantity of receipts/issues : Material stock x100

If the percentage of receipts/issues is smaller than Movement rate,the material is slow or non-moving

Devaluation percentage

Devaluation indicator

Updating prices in the material master record


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Physical inventory


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Physical inventory analysis

entering the result of the count into the system

initiating a recount, if necessary

posting inventory differences

Processing Steps

Creating a physical inventory document

Entering the Physical Inventory Count

Post inventory differences


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sap mm complete

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