Introduction to SAP R3 (Materials Mnamagement)

7/28/2019 Introduction to SAP R3 (Materials Mnamagement)

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Introduction SAP R/3 – MM

Satyanarayana Murthy



ERP-Software: SAP R/3

Client/ Server

ABAP/4

R/3

SD

MM

PP

QA

PM

HR IS

OC

PS

AM

CO

FI

Sales and

Distribution

MaterialManagement Controlling

Financial

Accounting



3

Components of Materials

Management



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



Organizational Structures



6

Organizational Structures

• Client

• Company

• Plant• Valuation Area

• Storage Locations

• Purchasing Organizations• Purchasing Groups



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



Organizational Structures: Company &

Company code

• The company code is the smallestorganizational unit of external accounting forwhich a complete, self-contained bookkeeping

system can be replicated.• A company code represents an independent

unit producing its own balance sheet, forexample, 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



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



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



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.



Purchasing organization

purchasing group MG 0, 3purchasing organization

purchasing group MG 1, 4

purchasing group MG 2, 5

purchasing group MG 7, 8, 9plant

purchasing group MG 6

material

group



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 severalpurchasing organizations.

h



Inventory Management with a

Warehouse Management Systemclient

0001plant

storage location

001warehouse number

001storage type

05-04-03

002

05-04-04storage bin

MM

WM

company code

0001 – ABC inc.

0001 – Jones inc. 0002 – Model Ltd.

purchasing organization

0001

0001 0002 0003

0002 0003 0004 0001

0002 0003 0004

distrib.-center factory

(physical stock)



The Module MM – Main Functions



MM – interdependencies to other modules

MM

material master

purchasing

requirements plan.

inventory mgmt.

invoice verification

SDsales and

distrib.

PM

plant

maintenance

QM

quality

management

PPproductionplanning

Logistik

FI

financial acc.

CO

controlling

AM

fixed assets mgmt.



Basic Data

• Master records - include information about1. vendors

2. material and services to be procured

3. the relation between 1. and 2. ( purchasing inforecord )e.g. prices / terms and conditions

• bills of material for – production planning

– purchasing – sales and distribution

– withdrawal of Material



• invoice entry

• invoice verification

• payment handling

• request for quotation

• quotation processing

• purch. order handling

Structure of the Vendor Master Record

General data

• name

• address

• control data

accounting data

• bank account

• acc. maintenance

• payment

purchasing

• terms and cond.

• partner functions

• currency

utilization

for each

purchasing

organization

client wide or

for each

company code

client wide

area of validitysections



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 AGGermany, to create purchase orders and invoices

denominated in euros.



Create a Vendor

Menu Path Logistics Materials Management

Purchasing Master Data

Vendor Central Create

Transaction Code XK01

Procedure

1.Call up the transaction as follows:

.



Create a vendor

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

On the Create Vendor: Initial Screen, enter the following

data:



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



1. Choose until you reach the Create Vendor: Accounting andmake sure that 160000 appears in the Reconciliation Account

160000 field.

2. Choose until the Create Vendor: Purchasing Data screen

appears.

3. On the Create Vendor: Purchasing Data screen, check that the

order currency is EUR.

4. Choose until the Create Vendor: Partner Functions screen

appears.


appears.


appears.

Create a Vendor



Create a Vendor



Views on the Material Master Recordeach view is maintained by a certain user department of the firm

accounting: valuat ion - und calculat ion-specif ic information

requirements planning: information about mater ial requ irements

plannin g (e. g. reorder p oin t)

purchasing: e. g. responsible purchasing group, order unit

engineering: technical information storage: information about warehousing , mater ial mo vements, ...

forecast: information about the forecast ing o f the mater ial requirements

S & D: informationen about sales o rders and pr ice determ inat ion



Demo: Create Material Master




•Select the views: Basic data 1, Purchasing, Purchase Order

text, Gl. Plant Data/Storage 1, Accounting 1




SAVE



purchasing info record

info record

pricesterms & cond.

PO statisticstolerance levels

date

quotation

order

outlineagreement



outline agreem.

PO

Purchasing Process

MM

X X X

X X

determination: requirements

X X X

X X

determination: source of supply

vendor 1

vendor 2

vendor selection

vendor

PO

PO

purchase order processing

PO monitoring

goods received &

inventory mgmt.

PO invoice?=

invoice verification

?



Create Purchase Order (PO)

1

vendor known

purch. order

vendor 2

2

vendor not known

terms & cond.

outline

agrement

source list

vendor

info record

3

assigned purchase

requisition exists

(from user department)

purch. req.vendor 2

purch. order

purch. order



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).



Purchase Requisition

Document generated by a user department

or storeroom-personnel to notify the

purchasing department of items it needs toorder, their quantity, and the timeframe. It

may also contain the authorization to

proceed with the purchase. Also called

purchase request or requisition.



Request for Quotation

Is a standard business process whose purpose is

to invite suppliers into a bidding process to bid onspecific products or services. RFQ generally

means the same thing as IFB (Invitation For Bid)



Purchase Order

Buyer-generated document that authorizes a

purchase transaction. It sets forth thedescriptions, quantities, prices, discounts,

payment terms, date of performance or

shipment, other associated terms and conditions,

and identifies a specific seller.



Create Purchase Requisition




• In the item, enter your material, Plant= 1000, QT = 100




• Save your Purchase requisition

• Take note of Purchase requisition number



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)




• Enter your vendor, and price 30 euro and save

P i O d E (G d R i )



Posting an Order Entry (Goods Receipt)

MM

Logistics

purchasing req. planning

inventory

controlling

invoice

verification

goods receipt

inventory mgmt.

goods issue. transfer posting

SDsales and

distrib.

PM

plant

maintenance

QM

quality

management

PPproductionplanning

FI

financial acc.

CO

controlling

AM

fixed assets mgmt.

i O d



Demo: Posting Order Entry (Goods Received)

1. Use T_code : MIGO

2. Select Goods Receipt3. Select Purchase Order

4. Enter PO number for goods to be received.

5. Hit "Enter"

D P i O d E ( )




6. Enter Document date & posting date

7. Enter Header text (comment) if necessary.8. Close detail data.

D P i O d E ( d d)




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

D P ti O d E t ( d i d)




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 item12. Input actual quantity (3 & 2 pcs ).

13. Hit "Enter"

D P ti O d E t (G d R i d)




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



Invoice Verificationinput

information invoice verification

output

information

ordersactions:

• enter invoice

• verify invoice• post invoice

• update

relevant data

• (re-edit

invoice)

goods receipt

master data:

material

vendorsaccounts

terms & cond.

financial

accounting

asset

management

cost accounting

C t I i



Create Invoice

Create Invoice using Tcode MIRO

Enter the Purchase order no. and click on Enter,

to display the material details.

Enter the Required details in allTabs



Create Invoice (contd..)

Click the check box, to calculate the Tax




Enter the Amount and click on save




Invoice is created

Demo: Invoice Verification




Using the tcode: MIRO"





net amount for

positions

Introduction to SAP R3 (Materials Mnamagement)

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