sap mm overiview

1. Introduction SAP R/3 – MM
Dr. Djamal Ziani
King Saud University

2. ERP-Software: SAP R/3
Sales and
Distribution
Material
Management
SD
Financial
Accounting
FI
CO
MM
R/3
PP
AM
Client / Server
PS
ABAP/4
QA
OC
PM
HR
IS
Controlling

3. Components of Materials
Management
3

4. Organizational Data
• A hierarchy in which the organizational units
in an enterprise are arranged according to
tasks and functions
• Are static data and are rarely changed
• The definition of organization units is a
fundamental step, it is a critical factor in how
the company will be structured
4

5. Organizational Structures

6. Organizational Structures
•
•
•
•
•
•
•
Client
Company
Plant
Valuation Area
Storage Locations
Purchasing Organizations
Purchasing Groups
6

7. Organizational Structures: Client
• The client is a unit within an SAP R/3 system
that is self-contained both in legal and
organizational terms and in terms of data,
with separate master records and an
independent set of tables.
• From a business viewpoint, the client
represents a corporate group, for example.
• Client: 3 numerical digits

8. Organizational Structures: Company &
Company code
• The company code is the smallest
organizational unit of external accounting for
which a complete, self-contained bookkeeping
system can be replicated.
• A company code represents an independent
unit producing its own balance sheet, for
example, a company within a corporate group
(client).
• Company code = 4 characters

9. Organizational Structures: Plant
• Lowest valuation area
• Organizational level where Material
Requirements (MRP) runs
• Generally used to describe a production site, a
distribution center or centralized warehouse
• May be a physical or logical unit
9

10. Organizational Structures: Valuation
Area
• The valuation area determines at which level a
material is valuated (inventory value is
established)
• SAP R/3 allows valuation at the company code
or plant level, but recommends valuation area
be set at the plant level.
• Means each plant can have its own material
prices and account determination
10

11. Organizational Structures: Storage
Location
• Subdivision of a plant
• Where materials are managed (inventory
management)
– Raw Materials
– Maintenance, Repair, and Other (MRO)
– Finished Product
• May be a physical or logical unit
11

12. Organizational Structures: Purchasing
Organizations
• An organizational unit responsible for
procuring materials or services for one or
more plants and for negotiating general
conditions of purchase with vendors.
• The purchasing organization assumes legal
responsibility for all external purchase
transactions.

13. Purchasing organization
material
group
purchasing organization
purchasing group MG 0, 3
purchasing group MG 1, 4
purchasing group MG 2, 5
purchasing group MG 6
plant
purchasing group MG 7, 8, 9

14. Organizational Structures: Purchasing
Organization Groups
•The purchasing organization is further
subdivided into purchasing groups (buyer
groups), which are responsible for day-to-day
buying activities.
A purchasing group can also act for several
purchasing organizations.

15. Inventory Management with a
Warehouse Management System
0001 – ABC inc.
0001 – ABC inc.
client
company code
0001 – Jones inc.
purchasing organization
plant
distrib.0001
center 0001
storage location
0001
0001
0001
0001
0002
0002
0002
0002
0003
0003
0002
0002
warehouse number
storage type
storage bin (physical stock)
0002 – Model Ltd.
0003
0003
0004
0004
0003
0003
0001
0001
MM
factory
0004
0004
001
001
001
001
WM
002
002
05-04-03
05-04-03
05-04-04
05-04-04

16. The Module MM – Main Functions

17. MM – interdependencies to other modules
Logistik
PP
production
planning
MM
material master
SD
sales and
distrib.
purchasing
requirements plan.
QM
quality
management
FI
financial acc.
inventory mgmt.
invoice verification
CO
controlling
PM
plant
maintenance
AM
fixed assets mgmt.

18. Basic Data
• Master records - include information about
1. vendors
2. material and services to be procured
3. the relation between 1. and 2. (purchasing info
record)
e.g. prices / terms and conditions
• bills of material for
–
–
–
–
production planning
purchasing
sales and distribution
withdrawal of Material

19. Structure of the Vendor Master
Record
sections
utilization
area of validity

General data
• name
• address
• control data
client wide

purchasing
• terms and cond.
• partner functions
• currency
•
•
•
request for quotation
quotation processing
purch. order handling

accounting data
• bank account
• acc. maintenance
• payment
•
•
•
invoice entry
invoice verification
payment handling
for each
purchasing
organization
client wide or
for each
company code

20. Create a Vendor
Creating Your Own Vendor Master Record
Usage
We recommend that you create your own vendor master
record for this scenario. If, however, you prefer to use the
reference vendor instead, it could be that the order currency
has already been changed and this IDES scenario may no
longer work.
You create a German vendor in company code 1000, IDES AG
Germany, to create purchase orders and invoices
denominated in euros.

21. Create a Vendor
Procedure
1.Call up the transaction as follows:
Menu Path
Logistics → Materials Management
→ Purchasing → Master Data →
Vendor → Central → Create
Transaction Code
XK01

22. .
Create a vendor
On the Create Vendor: Initial Screen, enter the following
data:
Field
Data
Vendor
Your own vendor (choose a
number between 1000 and
1999)
Company code
1000
Purch. organization
1000
Account group
LIEF
Reference vendor
1080
Reference company code
1000
Reference purchasing
organization
1000

23. Create a Vendor
On the Create Vendor: Address screen, enter the following data:
Field
Data
Description
Any
Search term
Any, for example "euro"
Street/House number
Any
Postal code/City
5-figure, numerical (any)
Country
DE
Language
DE

24. Create a Vendor
1. Choose
until you reach the Create Vendor: Accounting and
make sure that 160000 appears in the Reconciliation Account
160000 field.
2. Choose
appears.
until the Create Vendor: Purchasing Data screen
3. On the Create Vendor: Purchasing Data screen, check that the
order currency is EUR.
4. Choose
appears.
until the Create Vendor: Partner Functions screen
5. Choose
appears.
until the Create Vendor: Partner Functions screen
6. Choose
appears.
until the Create Vendor: Partner Functions screen

25. Create a Vendor

26. Create a Vendor

27. Create a Vendor

28. Views on the Material Master Record
each view is maintained by a certain user department of the firm







accounting: valuation- und calculation-specific information
requirements planning: information about material requirements
planning (e. g. reorder point)
purchasing: e. g. responsible purchasing group, order unit
engineering: technical information
storage: information about warehousing, material movements, ...
forecast: information about the forecasting of the material requirements
S & D: informationen about sales orders and price determination

29. Demo: Create Material Master

30. Demo: Create Material Master
•Select the views: Basic data 1, Purchasing, Purchase Order
text, Gl. Plant Data/Storage 1, Accounting 1

31. Demo: Create Material Master

32. Demo: Create Material Master

33. Demo: Create Material Master

34. Demo: Create Material Master

35. Demo: Create Material Master

36. Demo: Create Material Master
SAVE

37. purchasing info record
info record
prices
terms & cond.
PO statistics
tolerance levels
date
quotation
outline
agreement
order

38. Purchasing Process
PO
?
=
invoice
X
X
X
invoice verification
X
X
determination: requirements
vendor
X
X
X
goods received &
inventory mgmt.
MM
X
outline agreem.
X
determination: source of supply
vendor 22
vendor
vendor 11
vendor
PO
PO
PO
PO monitoring
purchase order processing
?
vendor selection

39. Create Purchase Order (PO)
vendor 22
vendor
purch. order
1
vendor known
terms & cond.
2
vendor not known
source list
purch. order
outline
agrement info record
vendor
3
assigned purchase
requisition exists
(from user department)
vendor 22
vendor
purch. req.
purch. order

40. Purchasing Process
• Create a requisition
• First release of requisition
• Create RFQ (Request for Quotation) with
reference to requisition
• Create PO (Purchase Order) with reference to
RFQ
• Department receives material ordered (GR)
• Department pays invoice (MIRO).

41. Purchase Requisition
Document generated by a user department
or storeroom-personnel to notify the
purchasing department of items it needs to
order, their quantity, and the timeframe. It
may also contain the authorization to
proceed with the purchase. Also called
purchase request or requisition.

42. Request for Quotation
Is a standard business process whose purpose is
to invite suppliers into a bidding process to bid on
specific products or services. RFQ generally
means the same thing as IFB (Invitation For Bid)

43. Purchase Order
Buyer-generated document that authorizes a
purchase transaction. It sets forth the
descriptions, quantities, prices, discounts,
payment terms, date of performance or
shipment, other associated terms and conditions,
and identifies a specific seller.

44. Create Purchase Requisition

45. Create Purchase Requisition

46. Create Purchase Requisition
• In the item, enter your material, Plant= 1000, QT = 100

47. Create Purchase Requisition
• Save your Purchase requisition
• Take note of Purchase requisition number

48. Demo: Create Purchase Order

49. Demo: Create Purchase Order
• Open document overview: Click on document
overview button
• Choose “Selection variant list” icon
•Then select “My purchase requisition”, you will get
your purchase requisition listed
•Click on “adopt” icon, your purchase requisition
will be copied to the purchase order (or you can
drag and drop it into the shopping cart)

50. Demo: Create Purchase Order

51. Demo: Create Purchase Order
• Enter your vendor, and price 30 euro and save

52. Posting an Order Entry (Goods Receipt)
Logistics
PP
production
planning
MM
purchasing req. planning
goods receipt
SD
sales and
distrib.
inventory mgmt.
goods issue.
QM
quality
management
FI
financial acc.
inventory
controlling
transfer
posting
invoice
verification
CO
controlling
PM
plant
maintenance
AM
fixed assets mgmt.

53. Demo: Posting Order Entry (Goods Received)
1. Use T_code : MIGO
2. Select Goods Receipt
3. Select Purchase Order
4. Enter PO number for goods to be received.
5. Hit "Enter"

54. Demo: Posting Order Entry (Goods Received)
6. Enter Document date & posting date
7. Enter Header text (comment) if necessary.
8. Close detail data.

55. Demo: Posting Order Entry (Goods Received)
9. Notice that movement data is "101"
10. If you only received first item, then Check the "OK" box for
first line item.therefore, the second item need not be processed

56. Demo: Posting Order Entry (Goods Received)
11. If you only received 3 pcs out of 10 pcs of item one & 2 pcs out of
10 pcs of item two, then Check the "OK" box for both line item
12. Input actual quantity (3 & 2 pcs ).
13. Hit "Enter"

57. Demo: Posting Order Entry (Goods Received)
14. Click "Check" button to find out if there is any error.
15. Check the "status" column .
. Green means OK . Yellow means Warning . Red means error

58. Invoice Verification
input
information
orders
goods receipt
master data:
material
vendors
accounts
terms & cond.
invoice verification
output
information
actions:
•
•
•
•
enter invoice
verify invoice
post invoice
update
relevant data
• (re-edit
invoice)
financial
accounting
asset
management
cost accounting

59. Create Invoice
Create Invoice using Tcode MIRO
Enter the Required details in all
Tabs
Enter the Purchase order no. and click on
Enter, to display the material details.

60. Create Invoice (contd..)
Click the check box, to calculate the Tax

61. Create Invoice (contd..)
Enter the Amount and click on save

62. Create Invoice (contd..)
Invoice is created

63. Demo: Invoice Verification
Using the tcode: MIRO"

64. Demo: Invoice Verification

65. Demo: Invoice Verification
net amount for
positions