SAP – MM Overview

SAP ERP
• SAP is an enterprise resource planning (ERP) software product capable of
integrating multiple business applications, with each application representing a
specific business area. These applications update and process transactions in
real time mode. It has the ability to be configured to meet the needs of the
business.
• SAP are categorized into 3 core functional areas:
– Logistics
• Sales and Distribution (SD)
• Material Management (MM)
• Warehouse Management (WM)
• Production Planning (PP)
• General Logistics (LO)
• Quality Management (QM)
– Financial
• Financial Accounting (FI)
• Controlling (CO)
• Enterprise Controlling (EC)
• Investment Management (IM)
• Treasury (TR)
– Human Resources
• Personnel Administration (PA)
• Personnel Development (PD)
 What is SAP ?

• Master Data:

Master data is data that remains unchanged

over a period of time. It contains information that
is always needed in the same way.

Transaction data:

Data relating to the day-to-day transactions.

Using Matchcodes/Search Helps

• Matchcodes are a SAP specific search method you can use to find
information
• Several different search criteria are possible
• To access a matchcode, press F4
• New matchcodes can be created by selecting the file folder tabs at the top of
the matchcode window
• To enter a multiple selection of values for any one matchcode, position your
cursor in that field, click and enter your selections
• To close the matchcode window, click
Storage Location
It represents the physical area within a plant where the materials are stored.
It is attached to a plant.

Manufacturing Plants
– Raw Material
– Fuels
– Semi finished
– Central Stores
– SQC
– FG Warehouse

Trading Divisions & Sales Depots

– Depot Stores
– Services Division
Purchase Organization
It is responsible to procure material and services, negotiation of price with vendor.

It can be
Company specific - assigned to company code
Plant specific – assigned to plant

Purchase group
Represents buyer or group of buyers responsible for specific purchasing activities.

It represents buyer
It is used for reporting

Plant & Product Specific

Material Type
Material type is the important identification for material master.
Different fields and screens are controlled with respect to material type
HSIL Material Types and their Number Ranges
Mat Internal /
Descrption From To
Type External
Body Raw Materials, Body Additives, Glaze Raw
ZHRM Raw Material Internal 100000 119999
Materials, Colour Stains, Components etc.

ZHRB Raw Material Used for Bhiwadi Plant with Split Valuation External Alpha Numeric
ZHOS Operating Supplies Fuels, Oils & lubricants, etc. Internal 130000 139999

ZHNV Non Valuated items Machinery, Assets, Scrap materials Internal 150000 169999

General Stores, Bolt & Nuts, Building Materials,

ZHCN Consumables Internal 200000 299999
Refractories, Lab Items, Stationary, Catologue etc.

Maint. Spares, Electricals, Pipes & Pipe Fittings,

ZHSP Engg & Spare Parts Internal 300000 399999
Tools, etc.
ZHPM Packaging Paddy straw, BOPP tapes, Thermocole,Corr. Box,
Internal 400000 449999
Polythene Sheets and Bags
ZHTG Traded Goods Internal 500000 599999
ZHSF Semi Finished Goods Not to be used for Crabtree Division External
Semi Finished (Split
ZHSV External
Valuation)

ZHFG Finished Goods Manufactured Sanitaryware External Numeric Alpha

ZHFP Finished Products Manufactured Faucets External Alpha Numeric

ZHPR Poduction Resource Tools External
Data in SAP
There are two important types of data in SAP

Master Data
Master data is the backbone for each transaction.
Without master data transactions can not be performed.
E.g. Material master
Vendor master
Purchasing info record

Transaction data
Transaction data are created when performing a transaction.

Transaction data are created with the input from master data.

e.g. Purchase requisition

Purchase order
Goods receipt
Invoice verification
MM Specific Master data

Material Master
Vendor Master
Info record
MRP Data
Material Master views
Material master contains entire information about the material related
all the departments of an organization.

Information related to different departments is stored through different

views of material master.

Views for material master are

Basic data
Classification
Sales views
Purchasing
MRP views
Work scheduling
Storage locations
Warehouse data
Quality Management data
Accounting data
Costing data
 Views on a Material Master Record
Basic Data Purchasing

St

t MRP Sales

Material
A Stocks in plant/ master record Work
B
storage location scheduling

Quality
Accounting
management

Storage Forecasting

Warehouse
Classification
management
Vendor Master •`Vendor master contains all the information required to do business
with a vendor.

• Information is shared between the accounting and purchasing

departments.

• All data is grouped into three categories:

General data
Company code data Bank
Purch. Purchasing data

Purchase order
Order Recipient Payment Payee

Invoice
Vendor
Invoicing Party
Material
Purc. order Invoice

?
Goods Supplier =
Goods receipt Invoice verification
 Purchasing Info Record
It is created for the combination of material, vendor and
purchase organization.

General data Texts

Vendor data
Origin data
Order unit

Control data Prices and conditions

Delivery time Gross price

Discount
Minimum quantity Freight
Tolerances
Price history
Ordering statistics
Change history
 MM Module Data flow
Purchase Invoice
order 1 Determine Requirements

Plan
7 Invoice verification Rqmts.

MM
Materials
Goods receipt and mgmt
6 inventory management Source
2 determination

Purchase
Order follow-up order
5

3 Vendor selection
4 Order processing
 MM Process
1. MRP run triggers the requirements or Manual Requisitions Created.
2. Purchase requisition is released.
3. Vendor is selected.
4. Prepare Purchase Order.
5. Release Purchase Order.
6. Follow up with vendor for supply.
7. Goods Receipt.
8. Receive Invoice and pay vendor.
What is MRP?
MRP stands for: Materials Requirements Planning.

 The function of MRP is to provide material availability, that is, it is used to procure
or produce the requirement quantities on time. This process involves the
monitoring of stocks and demand, leading to the automatic creation of
procurement proposals for purchasing or production.

 The main objective of MRP is to determine which material is required, the quantity
required and by when it is required.

 MRP compares the requirements for end products with the current stocks and
planned manufacturing orders.

 MRP then explodes the product BOM’s to determine the ‘dependent

requirements’ for intermediate products and purchased raw materials.

 MRP can be run Daily / Weekly / Monthly, which is scheduled for automatic run. It
can also be done manually.
Purchase Requisition: PR is the request for Material and services. It is the first trigger to
the buyer to arrange for procurement.

• It is generated automatically or manually.

• Item category and account assignment are important in PR

or

Material Resource Direct Entry

Purchase Order
Planning Purchase Order
Purchase Order

Purchase requisition Release strategy Purchase order

Determine source of supply

Release Strategy
Release strategy helps to control further processing of the Documents.
Based on conditions, different person or department can be authorized to release in
sequence
It can be applied for PR, RFQ and for PO.

Does a Strategy Apply? Who can do what?

Release Conditions Release Strategy

Value Who is Authorised to Release?

Purchase Group In what Order must the
Plant Releasing Occur?
Document Type What is the Release Indicator?

What can the Requisition be Released to? Who is Authorised to release?

Release Indicator Release Code

Released/Blocked for Ordering Two digit code associated with

a user ID
Purchase Order

• A purchase order is a formal request to a vendor to provide certain materials or

services under specific conditions (quantity, price, delivery date, etc.)

• PO is the legal document.

• PO can be controlled with header level release procedure.

• Item category and account assignment are important in PO like PR.

Purchase Purchase Goods Invoice

Requisition Order Receipt Posting

Planning, Reporting, and Analysis

Purchase Order Processing

Purchase
Purchase
Order
Order
• •Standard
Standard
Direct Entry
• •Sub
Subcontract
contract Statistics
or Purchase • •Consignment
Requisition Consignment
• •Third-party
Third-party Order History
Purchase Order
Purchase Order
Purchase Req.

Stock material Account assignment

(cost center, asset,
Consumable material project…)
Service
 Contents in Purchase Order

PO PO Account Pricing
Header Overview Assignment Conditions

Texts
Order
PURCHASE History
ORDER
Delivery
Schedules

Additional
Data Services Changes
Scheduling agreement
It specifies
Order quantity
Price
specific period to supply

There is a delivery schedule for each scheduling agreement

Helps to reduce paper work

Results of a Goods Receipt Posting

Transaction documents are created both for materials management and finance.

Accounting
document
G/L accounts: Stock quantity
Consumption account Consumption statistics
GR/IR account

Material Point of consumption

document Cost center Order
Goods Receipt
Posting
Transfer
Order
Purchasing data:
Order item, Order history
 Invoice Processing

This last step in the procurement process includes invoice verification and updating
accounts payable in the FI module.

Purchase Purchase Goods Invoice

Requisition Order Receipt Posting

Planning, Reporting, and Analysis

 Payment will then be made later based upon the ‘open’ invoices posted on the
system
Invoice Verification Environment
• Invoice verification accesses data from purchasing, inventory
management, material master, and vendor master files.

G/L accounts
Purchase Assets
Order Purchase Order
Purchase Order
Cost centers

Projects
Vendor
Invoice Invoice Orders
verification
Goods
Receipt Posting
Postingan
aninvoice
invoicein
inthe
theR/3
R/3System
System
updates purchasing and accounting
updates purchasing and accountingdata
data
Material master

Vendor master
 Vendor Payment

• Accounts payable reads the invoice file and pays all posted invoices due.
(Payment runs can be automated to occur at specific times.)

Vendor Bank
Financial 1000 Payment
Payment 1000
Accounting program
program

Motor Sports International 1449

1234 Main Street
New York, NY 10181 Date _______________

Pay to: ________________________________________

________________________________________________________

_______________ _________________

Released 12930 39040 2020 20202 10923 1449

Invoice