AMAR RAJA BATTERIES LIMITED

Implementation papers
Project-ARBL

Materials Management

Reliance Global Services Pvt. Limited

Hyderabad-500016

Ms.B.Surekha
MM Consultant
Contents:

1. Introduction.
1.1 About the Project.

2. Enterprise structure
2.1 Define Company
2.2 Define Company Code
2.3 Controlling Area
2.4 Define valuation Level/Valuation Area
2.5 Define plant
2.6 Maintain storage location
2.7 Maintain Purchasing Organization.

3. Enterprise Structure –Assignment

3.1 Assign Company to Company Code
3.2 Assign plant to Company code
3.3 Assign Purchasing organization to Company code.
3.4 Assign Purchasing organization to Plants

4 Material Master
4.1 Material Types.
- Define Attributes of Material Types
- Define number ranges
4.2 Define Purchasing value Keys
4.3 Shipping Instructions
4.4 Material Groups

5 Vendor Master
5.1 Vendor Account Group
- Define Vendor account Group
- Number Ranges
5.2 Payment Terms
5.3 Check incoterms

6 Purchasing
6.1 Create Purchasing Groups
6.2 Source List
6.3 Purchasing Info Record
- Define Screen Layout
- Define Number range
6.4 RFQ/ Quotations
- Document Types
- Define Number Ranges
 6.5 Purchase Requisitions
- Document Types
- Define Number Ranges
6.6 Purchase orders
- Document types
- Define Number ranges
- Release Procedure
6.7 Contract
- Define Document Type
- Define Number range
6.8 Scheduling Agreements
- Define Document Type
- Define Number range
6.9 Conditions

7. Inventory Management & Physical Inventory

7.1 Set plant parameters
7.2 Number ranges assignment
7.3 Goods Movements
- Goods Issue/Transfer Postings
- Goods Receipt
7.4 Physical Inventory
7.5 Reservations
7.6 Negative Stocks

8 Valuation and Account Assignment

8.1 Split Valuation
8.2 Account Determination

9 Logistics Invoice Verification

List of Annexure

a) Flow Chart of MM Organization Structure

b) Material Master Records
1. Introduction

About the Project:

Amar Raja Batteries is a manufacturing Organization in the field ofmanufacturing Auto and
Industrial Batteries, with its Plants set up inTirupathi (A.P.). The company’s Annual turn
over is about 150 Crs. withoperating Inventories of about 30 Crs. The company has Plants
namely.

Plant Description
Plant 1 Amar Raja Power Plus
Plant 2 Amar Raja Power Stack
Plant 3 ABD.

The company Produces Batteries with name as given below:

ARK 40-12
4200
2009
3005
36AH/270CCA
DIN44

The company produces its products based on Customer specific orders as

well as make to stock and Sale through the sales network.

2.3.1.1.1.1 Enterprise Structure

2.1 Define Company

A company is an Organizational unit which represents a Business Organization according to

the requirements of the commercial law in a particular country. Financial Accounting is
based on company and it may consists one or more company codes. The Company name for
this project is Amaraja Batteries limited (ARBL).

Path for Defining Company

IMG  Enterprise Structure  Definition  Financial Accounting  Define Company.

2.2 Company Code

Company code is an organizational unit used in Accounting. It is used to structure the

Business Organization from Accounting perspective. One Company may have several
company codes. All the Accounts will be finalized at this level. Only one company Code
assigned for this company. Company Code for this company is ARBL.

Path for Defining Company Code.

IMG  Enterprise Structure  Definition  Financial Accounting  Define, Copy, Delete,

Check Company Code.

2.4 Maintain Controlling Area

Controlling Area is an Organizational unit. It is used in Cost Center Accounting and

Profitability. Controlling Area is nothing but Company Code that is ARBL.

Path for Maintain Controlling Area

IMG  Enterprise Structure  Definition  Controlling  Maintain Controlling Area

2.4 Define Valuation level/Valuation Area

Valuation level is nothing but the level at which the material is valuated. Valuation of stocks
can be managed at Company Code level or at Plant level. Once the valuation level cannot be
changed as and when required. The valuation level for this project is defined at plant level or
we can say plant is the Valuation Area.

Path for Defining Valuation level

IMG  Enterprise Structure  Definition  Logistic General  Define Valuation Level

2.5 Define Plant

The Plant is an operating area with in a Company Code. A Company Code can have several
plants. Three plants have assigned to the above Company Code

The Following plants were configured:

Plant Description
ARPP Amar Raja Power Plus
ARPS Amar Raja Power Stack
ARBD ARBD.
Postal Addresses of each Plant is given in the table below:

Plant Address

ARPP M/s. Amar Raja Batteries

LimitedRenigunta, Cuddapah Road,
Karkambadi-517520Tirupathi, - A.P.

ARPS M/s. Amar Raja Batteries

LimitedRenigunta, Cuddapah Road,
Karkambadi-517520Tirupathi, - A.P.

ARBD M/s. Amar Raja Batteries

LimitedRenigunta, Cuddapah Road,
Karkambadi-517520Tirupathi, - A.P.

Path to create Plant is given below.

IMG  Enterprice Structure  Definition  Logistic General  Define, Copy, Delete

Check Plant.

2.6 Maintain Storage Location

Storage location is the place where Stocks are physically kept with in the Plant. There may
be one or more storage locations in the plant. There are four storage locations in this project.
One Storage Location is common for all the three plants for Finished products.

The storage locations configured were listed as:

Plant Storage Location

ARPP ARP1
ARPP ARP4
ARPS ARP2
ARPS ARP4
ARBD ARP3
ARBD ARP4
Path for Defining Plant.

IMG  Enterprise Structure  Definition  Materials Management  Maintain Storage

Location.

2.7 Maintain Purchasing Organization

Purchasing organization is the organizational unit that is responsible for all Purchasing
activities. It can be assigned to several Company Codes or to one Company Code. A
Purchasing Organization also exists without being assigned to any Company Code. It must be
linked to one or more plants. One Purchasing Organization is managing all the activities in
this Company.

Purchasing Organization ARPO

Path for Maintaining Purchase Organization

IMG  Enterprise Structure  Definition  Materials Management  Maintain

Purchasing Organization.

3 Enterprise Structure – Assignment

Assignment is nothing but making links between all the Organizational Units. It
establishes the process of business transactions.

3.1 Assign Company to Company Code

Company CoCd

ARBL ARBL

Path for the above is follows.

IMG  Enterprise Structure  Assignment Financial Accounting Assign Company to

Company Code.
3.2 Assign Plants to Company Code

Co. Code Plants

ARPP

ARBL ARPS

ARBD

Path for the above is follows

IMG  Enterprice Structure  Assignment Logistic General  Assign plant to Company

Code.

3.3 Assign Purchasing Organization to Company Code

Pur . Org CoCd

ARPO ARBL

3.4 Assign Purchase Organization to Plant

Pur . Org Plants

ARPP

ARPO ARPS

ARBD
4. Materials Master

4.1 Material Types

Material can be grouped with same basic attribute/quality. Different types of Material groups
can be created. In SAP each group called Material Type. Example of Material Types : Raw
Materials, Packing materials, Spare Parts, Finished Goods etc. Material Type plays a major
role in Material Master.

Defining Attributes of Material Type

The following are the list material types defined in this Project

Material Type Description

ZROH Raw Materials
ZFRT Finished Goods
ZHLB Semi finished Product
ZVRP Packing Materials
ZRSA Spare Parts
Check Quantity and Value updates for all these Material Types in all
the Valuation areas i.e.; Plants.

Path to create Material Type

IMG  Logistic General  Materials Management  Basic Settings  Material Type 

Define Attributes of Material Groups.

Define Number Ranges

Number Range group for all the Material types is defined as below

From No. To No
000000000100001001 000000000100002000

Above Number Range has been assigned to Material Types

Path to Define Number Ranges

IMG  Logistic General  Materials Management  Basic Settings  Material Type 

Define Number Range for Material Type.

4.2 Define Purchasing Value Keys

It is a key Reminder days and tolerance limits for the particular Material. Purchase Value
defined for this project is AR.

Path to create Purchasing Value Key

IMG  Materials Management  Purchasing  Material Master  Define Purchase Value

keys.

4.3 Shipping Instructions

Shipping Instructions defined for this project are AB.

IMG  Materials Management  Purchasing  Material Master  Define Shipping

Instructions

4.4 Define Material Groups

Material Group is the key used to group together materials with same
attributes in groups.Three Material Groups have been created.
 Group Description
MG1 Metals Group
MG2 Chemicals & Acids
MG3 Plastics And Consumables Group

Path for Creation of Material Group

IMG  Logistic General  Material Group  Create Material Group

4.3.1.1.1.1.1.1.1 Vendor Master

5.1 Vendor Account Group

Vendor Account is nothing but grouping of properties which control the creation of Master
Records. Account Group for this project is ARBL.

Path to create Vendor Account Group

IMG  Financial Accounting  Accounts Payable & Receivable  Vendor Accounts 
Master Data  Preparation for creating vendor Master Data

Path to create Number Range

IMG  Financial Accounting  Accounts Payable & Receivable  Vendor Accounts 

Master Data  Create Number Ranges for Vendor Accounts

5.2 Payment Terms

Depending on the requirement of Material and value of the Material Payment Terms will be
finalized. Payment Terms defined for this company are ARBL and 0001.

Path to Define Payment terms

IMG  Materials Management  Purchasing  Vendor Master  Define Terms of

Payment

5.3 Check Incoterms

Incoterms are international rules for interpretation of the most commonly used terms of
foreign trade. Five types are defined in this project.

Incoterms Description
FOB Free On Board
CIF Cost Insurance Frieght
EXW Ex-Works
FCA Free Carrier
DDP Delivery Duty Paid

Path for Incoterms:

IMG  Materials Management  Purchasing  Vendor Master  Check Incoterms

6 Purchasing

6.1 Create Purchasing Groups

Purchasing group is an individual or group of individuals for purchase of goods.

The fallowing purchasing Groups are defined:

Purchase Group Description

AB1 PUR GROUP 01
AB2 PUR GROUP 02
AB3 PUR GROUP 03

Path for Creating Purchase Groups:

IMG  Materials Management  Purchasing  Create Purchase Groups

6.2 Source List

Source List Requirement at Plant Level Defined.

Path: IMG  Materials Management  Purchasing  Source List  Define Source List
Requirement at Plant Level.

6.3 Purchase Info Record

This is the first step in procurement procedure it gives a relation between a material and
vendor.

Path to Create Info Record

IMG  Materials Management  Purchasing  Purchasing Info Record.

Path to Create Info Record

IMG  Materials Management  Purchasing  Create Number Range

6.4 RFQ/Quotations

Configurations made for creating Requests for Quotations, maintain and Comparison.
Separate Document type ARB is defined for Request for Quotation and corresponding
number ranges internal & external AR, AX created and assigned respectively.
Path for Document Type:

IMG  Materials Management  Purchasing  RFQ/Quotation  Define Document

Types.

Path for Number Range:

IMG  Materials Management  Purchasing  RFQ/Quotation  Define Number Range.

6.5 Purchase Requisitions

Separate Document type ANB is defined for Purchase Requisition for this project and
corresponding number ranges internal & external AR, AX are created and assigned
respectively.
Path for Document Type

IMG  Materials Management  Purchasing  Purchase Requisition  Define Document

Types.

Path for Number range

IMG  Materials Management  Purchasing  Purchase Requisition Define Number

Ranges.

6.6 Purchase Order

Separate Document type ABB is defined for Purchase Order for this Project and
corresponding number ranges internal & external AR, AX are created and assigned
respectively.
Path for Document Type
IMG  Materials Management  Purchasing  Purchase Order Define Document
Types.

Path for Number range

IMG  Materials Management  Purchasing  Purchase Order Define Number
Ranges.

- Release Procedure for Purchase Orders

Release Procedure or Approving Procedure is defined at Purchase Order . Release Groups

and Release Codes are given below.

Release Groups: AR
Release Codes: A1
A2
A3
A4

Release Strategy AR
Path for Release Procedure

IMG  Materials Management  Purchasing  Purchase Order  Release Procedure for

Purchase orders.

6.7 Contracts

Contracts are long term agreements. A separate Document types for value and Quantity
contracts are created VAK & QAK respectively for this project. Number Ranges AR & AX
have created and assigned.

Path for Configuring Contracts

IMG  Materials Management  Purchasing  Contract  Define Document Types.

Path for Defining Number Range

IMG  Materials Management  Purchasing  Contract  Define Number Range.

6.8 Scheduling Agreements

Scheduling Agreements are also long term agreements with delivery schedules. A separate
Document types for Scheduling Agreements without and with releasing order AP & APA are
created respectively. Number Ranges AR & AX have created and assigned.

Path for Configuring Scheduling Agreements

IMG  Materials Management  Purchasing  Scheduling Agreement  Define

Document Types.

Path for Defining Number Range

IMG  Materials Management  Purchasing  Scheduling Agreement  Define Number

Range.
6.9 Conditions

Conditions are defined for price determination in the purchase of Materials. Conditions will
be customized depending on Discount offered, Taxes & Duties, freight etc.

Try to change the slide

Path for Conditions:

IMG  Materials Management  Purchasing  Conditions  Define Price Determination

Process.

Accesses Sequence PBXX(Gross Price)

Condition Type ARBL
Schema RMARBL
Vendor Schema Group AR
7 Inventory Management and Physical Inventory

Types of Stocks

 Unrestricted use Stock

Unrestricted Stock is nothing but the readily available stock at stores.

 Quality Inspection Stock

Material under Inspection is called Quality Inspection Stock.

 Blocked Stock

After Inspection material will be blocked.

 Restricted use Stock

Based on planned Orders Material will be reserved or restricted to use.

7.1 Set Plant Parameters

Plant Parameters Set for Goods Movements, Physical Inventory and Reservations.
These settings have done for all the tree plants.

Path for the Setting Plant Parameters

IMG  Materials Management  Inventory Management & Physical Inventory  Plant

Parameters.
7.2 Number Assignment

Existing Number Assignments are used for this project.

7.3 Goods Movements

Movement of Goods can be divided into several types. Major two types are Goode Receipt
and goods Issue. Over and above these movements Goods can be transferred from one plant
to plant, stores to stores, Unrestricted use to Quality etc. All the posting can be done by
various codes.

- Goods Issue/Transfer Posting

Settings made to create Storage Location automatically for the three plants.

Path for the above Movement

IMG  Materials Management  Inventory Management & Physical Inventory  Goods

Issue /Transfer Posting
- Goods Receipts

Goods receipt can be against Purchase Order or an Order. Without Purchase Order also
goods can be posted.

Set Tolerance Limits

For each Tolerance key Tolerance limit can be set per Company Code
The fallowing variances are checked in Inventory Management.

Tolerance Key B1 - Set as %

Tolerance Key B2 - Set as %
Tolerance Key VP - Set as %

Settings made to create Storage Location automatically for the three plants.

Path for the above Movement

IMG  Materials Management  Inventory Management & Physical Inventory  Goods

receipt

7.4 Physical Inventory

Physical Inventory is nothing but the Material Physically present in the stores at the end of
the year. This can be compared with the information available in the system.

Path IMG  Materials Management  Inventory Management & Physical Inventory 

Physical Inventory

7.5 Reservations

Based on the requisitions or orders material can be reserved. The Reserved material can not
be issued.

Path IMG  Materials Management  Inventory Management & Physical Inventory 

Reservations

7.6 Negative Stocks

Goods received Physically but not posted in the system or goods issued but not posted in the
system called Negative Stocks.
Path to maintain Negative Stocks

IMG  Materials Management  Inventory Management & Physical Inventory 

Negative Stocks.

8 Valuation and Account Determination

8.1 Split Valuation

Split Valuation is nothing but mode of procurement of material of total material. Example
Material may be procured locally or through imports.

Path for Split Valuation:

IMG  Materials Management  Valuation and Account Determination  Split Valuation

 Configure Split Valuation.

8.2 Account Determination

All the A/C are posted automatically. Following flow shows how the Accounts are posted
automatically

Control Data (Movement Type)  Special Stock  Quantity Updation  Value Updation

 Movement Indicator  Consumption Posting  Value String  Counter  Trans/Event

Key  A/C Modifier  Check.

9. Logistic Invoice Verification

Invoice is entered manually after receipt of goods at stores these details will be verified in the
system internally with the Purchase Order.

Path for Invoice Verification:

IMG  Materials Management  Logistic Invoice Verification  Incoming Invoice.

ANNEXURE - I

FLOW CHART OF THE MM ORG. STRUCTURE.

ARBL
(Comp Code)

PURCHASE
ORGN

ARPP ARPS ABD

(PLANT 1) (PLANT 2) (PLANT 3)

ARS1 ARS2 ARS3

(St. LOC 1) (St. LOC 2) (St. LOC 3)

ARS4 ARS4 ARS4

ANNEXURE- II

MATERIAL MASTER RECORDS

S.NO MATERIAL M.TYPE SECTION UNIT M.GROUP V.CLASS PRIC PRICE(V)

DESCRIPTION E(S)

1 PASTED PLATES- ZHLB MECH EA MG2 7900 20

ARL50 +VE
2 PASTED PLATES- ZHLB MECH EA MG2 7900 20
ARL50 -VE
3 PURE LEAD ZROH MECH KG MG1 3000 36
4 2% ANTIMONY ZROH MECH KG MG1 3000 46
5 5% ANTIMONY ZROH MECH KG MG1 3000 50
6 TIN LEAD ZROH MECH KG MG1 3000 40
7 SILVER ALLOY ZROH MECH KG MG1 3000 55
8 ACCETALYNE ZHLB MECH KG MG2 7900 20
BLACK
9 BARIUM ZROH MECH KG MG2 3000 40
SULPHATE
10 SULPHURIC ACID ZROH MECH L MG2 3000 3
11 SHIMS ZROH MECH EA MG1 3000 11
12 BOLTS ZROH MECH EA MG1 3000 2
13 NUTS ZROH MECH EA MG1 3000 2
14 FLOCK ZHLB MECH EA MG1 7900 10
15 BINDER ZHLB MECH EA MG2 7900 10
16 JARS ZHLB MECH EA MG3 7900 24
17 COVERS ZHLB MECH EA MG3 7900 15
18 BUSHES ZHLB MECH EA MG1 7900 6
19 BOTTOM INSERTS ZHLB MECH EA MG3 7900 8
20 VENT PLUGS ZHLB MECH EA MG3 7900 5
21 ARK 10-12 ZFRT MECH EA MG3 7920 2150
22 4200 ZFRT MECH EA MG2 7920 1585
23 2009 ZFRT MECH EA MG2 7920 1065
24 3005 ZFRT MECH EA MG2 7920 880
25 36AH/270CCA ZFRT MECH EA MG2 7920 860
26 DIN44 ZFRT MECH EA MG2 7920 1262