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General Overview

SAP Overview

SAP Business Processes - Production

PP Production Planning
Sales and Operations Planning
Demand Management
Master Production Schedule
Material Requirements Planning
Planned Orders
Production Orders and Purchase Requisitions

MM Materials Management
Goods Receipt
Invoice Verification

FI Financial
Payment Processing
Inventory Valuation

Business Processes

Organizational Levels
Client -

Unit with its own data, master records and own

set of tables

Company Independent accounting unit within a client

Plant Organizational logistics unit
Storage Location Separates material stocks within
a plant

Purchasing Organization

A legal procurement

Purchasing Group A buyer or group of buyers

SAP IDES Organizational Structure

C lie n t
G e rm a n y

G r e a t B r it ia n

F ra n k fu rt

H a m b u rg

M a t e r ia l

F in is h e d G o o d s

U n it e d S t a t e s

G o o d s R e c e ip t

SAP Stored Data

Data Dictionary
Meta Data
Data on the structure of User Tables

User Data
Master Data
Data that does not change much
Examples include Vendors, Customers, Material
Transaction Data
Data that pertains to events and actions
Examples include Purchase Orders, Invoices, Production

Manufacturing Master Data

Material Master
Contains data on every item bought, sold, built, used in the business.
Heart of the SAP system

Bill of Material (BOM)

Hierarchical structure of components to build a product

Work Center
A physical place or group were work activity takes place

The path taken through various work centers in the assembly of a
component or product

Cost Center
A logical area of cost behavior for labor, setup and machine time
associated with activity that can be assigned to work centers.

Material Master Data

The material master is the heart of the SAP system.
Any item maintained (bought, sold, produced, stored)
must be in the material master.
Material Master Consists of data such as:
Material ID, Material Description, Unit of Measure,
Weight, Standard Cost, Average Cost, Production Time,
Lead Time, Material Type, Inventory Level, Planning Type

Material Master has many views that can be updated by

various areas depending on their use of the data.

Material Master Views

Basic Data


Material Resource Planning Sales

Stocks in Inventory

Work Scheduling


Quality Management



Warehouse Management


Material Master Data

Purchasing data for ordering
Inventory management data for posting goods
movement and managing inventory
Accounting data for material valuation
MRP data for Material Requirements Planning
Data is used by many areas of the business

Material Master Basic 1 Data View

Material Master Purchasing View

Material Master Accounting View

Material Master Storage Location View

Material Master Plant Stock View

Material Master Plant Data Store View

Material Master MRP 1 View

Material Master MRP 2 View

Material Master Org Levels

Data valid for the entire company
Material No, Desc, units of measure

Data valid for a plant

Purchasing, MRP, forecasting, work scheduling

Data valid for a storage Location

Storage Bin configuration and types

Some Different Material Types in SAP

Raw Materials
Operating Supplies
Semi-finished Goods
Finished Goods

The Material Type controls the following:

Whether the material is intended for a specific purpose, for example,
as a configurable material or process material
Whether the material number can be assigned internally or
The number range from which the material number is taken
Which screens appear and in what sequence
Which departmental data you may enter
What procurement type the material has; that is, whether it is
manufactured in-house or procured externally, or both
Which accounts are posted when posted to stock or leaves

The Industry Sector controls the following:

Mechanical Engineering
Plant Engineering
Chemical Industry
Controls which screens and in which order
Controls display of industry-specific fields

Bill of Material
Structured list of components that make up a product or assembly
Single Level
A BOM in SAP can consist of multiple Single Level BOMs




The BOM is used in:

Explodes the product demand to its lower level assemblies and
purchased components

Work Scheduling
Exploded demand is used to determine production schedules

Exploded demand can drive purchase requisitions and lines
items for blanket purchase orders.

Product Costing
Exploded relationships can be used to roll up costs of lower
level assemblies and components

Sample of BOM using Wagon Parts

SAP Create BOM Level I - Wagon

SAP Create BOM Level II Axle Assembly

BOM Graphical View