SAP-MM Functional Overview

Contents Topics Overview and Org. Structure

Invoice Verification/Valuation

Material Master

Automatic Account Determination

Purchasing Master Data Procurement Inventory Management/ Valuation

Overview and Organizational Structure

Definition: Logistics NCPDM (US National Committee on Physical Distribution Management) : "..physical distribution management .. is .. the integration of one or more activities for the purpose of planning, implementing and controlling the efficient flow of raw

materials, in-process inventory and finished goods from point of origin to point of consumption..."

Resource Management in Capital Investment Expense/costs Cash Logistics long-term

short-term

Capital resources Logistics chain Procurement Purchase orders  materials

Production Warehouse

Distributions

Sales Warehouse

 services

Vendor

Sales orders  products  services

Material resources

Capacity resources

Customer

Overview of MM Material requirements planning

External procurement

Internal procurement

Purchasing

Production

Invoice verification Invoice receipt

Warehouse management

Goods receipt Inventory management

A

?

Goods issue

Internal and external accounting

Transfer posting

Sales and distribution

B

Master data Material Batch Vendor G/L accounts Customer Storage bins . . .

Procurement Process Order

Invoice

MRP

? 7

Invoice verification

1

Requirement determination

MM

Goods receipt and 6 inventory management

Materials management

2

Source determination

Order

Order follow-up

3

5 4

Order processing

Vendor selection

Organizational structures in R/3 Organizational units Company Controlling areas Sales organizations

Purchasing organizations

Company codes Valuation areas Plants Storage locations/batches/special stocks

Invent. mgmt w/o warehouse mgmt Company Code

Plants

0001

Storage locations

0001

0002

0001

0003

0002

Invent. mgmt with Warehouse mgmt Company Code

0001

Plants

Storage locations

0001

0002

0088

0088

Warehouse numbers

Storage types

Storage bins

0002

001

001

05-04-03

005

05-04-04

Valuation Client

Company codes

0001

Plants

0001

0002

0002

0003

Example for Valuation RC

Company codes

Mumbai plant

Delhi depot

VAL. AT CO.CODE

125/ BAG

125/ BAG

VAL. AT PLANT

125/ BAG

150/ BAG

Plants

Accounting Client

Company codes

0001

0002

Business area 0001

Business area 0001

Business area 0002

0003

Purchasing Organization 0001

Company (Group)

Company codes

0001

Purchasing organizations

Plants

0002

0001

0001

0002

0002

0003

0003

0004

Organizational Entities in Purchasing Purchasing group 1

Purchasing group 2

Purchasing organization 1

Purchasing organization 2

Purchasing organization

Plant 1

Plant 2

Plant 2

Plant 10

Material Master

Material master record General data Material number Description Units of measure Technical data

Plant-specific data

Valuation

Valuation price MRP/type Planned delivery time Valuation procedure Valuated quantity Purchasing group Batch indicator

Storage locationspecific data Storage time Stockfields

Warehouse Management system data

Sales-specific data

Unit of measure Palletting instruction

Delivering plant Sales texts

Forecast data Consumption data

Units of measure Base unit: Piece

4

Box (unit of issue)

16

72

Crate

Pallet

(order unit)

(sales unit)

Material data maintenance: accounting Valuation class

MART

Allowed values

ROH

3000 3010 7920 3000

HALB HIBE

Maintenance of material data Price control

S

Standardprice control: Valuation of standard price from the material master record

V

Moving average price control: Final delivered price (such as purchase order price) influences the valuation price

Purchasing Master Data

Purchasing Master Data The Vendor

The vendor Purchasing

Bank

purch ase order

DEUTSCHE MARK DEUTSCHE MARK

Payment

Material

DEUTSCHE MARK

Vendor Invoice

order

account

? = Goods receipt


Organizational levels of vendor master record General data

Purchasing organization data

Company code 001 data Company code

Vendor master record General data Address Communication

Purchasing data Order currency Incoterms Minimum order value

Accounting data Bank data Payment transactions Account management

Valid for the whole group

Valid for one purchasing organization

Valid for the whole group or for one company code

Account group One-time account Account group

Type of number assignment

Interval for number assignment

Field selection

Control account Invoice

You Vendor Invoice

Enter invoice

G/L accounting

Accounts payable

Payables

Vendor A "Parallel"

Vendor

Purchasing Master Data Info Record

Purchasing info records Piece Piece % % Conditions Conditions

USD USD

Material

Info record Vendor A

Info record

Stock material M1

Info record Consumable material M2 Info record Vendor B

Info record

Service S1

Data in the purchasing info record General data

Texts

Vendor data Origin data Order unit

Control data

Prices and conditions

Delivery time Minimum quantity Tolerances

Gross price Discounts Freight

Price history Purchasing statistics Changes

Pricing Pricing procedure RM000

22 33

44

1.Price 2.Discount

PB00 RA00

11

Purchase order Vendor 123 Purchasing organization 2000 Item 10 PB00

120 pcs Price

$99

Condition type: PB00 Access sequence: PB01 Access sequence: PB01 1. Outline agreement 2. Vendor/material/ organizational level 3. Vendor/material group/ organizational level Records for condition type No valid record exists Valid record exists

55

Scale $100 for $99 for $98 for

1 pcs 100 pcs 200 pcs

Conditions Pricing procedure Condition type

PB00

Gross price Discount % Net price: Fixed freight charge +

RA01 FRA1

Effective price:

Calculation type Scale basis Price/quantity scale

Purchasing Master Data Source List

Source list

1.1.95 - 30.6.95

1.7.95 - 31.12.95

Vendor 1 allowed Vendor 2 allowed Vendor 3 allowed

Vendor 1 fixed

Source list

Material M1 Plant 0001

Procurement

Procurement Procurement Environment

Source list

External procurement environment Requirements determination

RFQs

Purchase Quotations Quota arrangement

Outline agreement

requisition

Source determination Vendor selection

Purchase order

Goods receipt

Piece Piece % % Conditions Conditions USD USD Purchase order history

Info record

Invoice receipt

Purchasing documents Purchase requisition

Purchase requisition

A

RFQ

?

Quotation

Quotation

Quotation

RFQ

?

B

Purch.order

Purchase order

31. Contract

Release order

Scheduling agreement

1.

Document header General General data data statistics statistics Messages Messages Conditions Conditions

Item 1

Additional data for item 1 Purchase order history

Item 2

Additional data for item 2

...

...

General data Conditions Texts Schedule line

...

Purchasing document

Structure of a purchasing document ocument ocument

Item category Purchasing document

A

B

Item Account assign. category category

C

Account assignment type Purchasing document A

Item type

Acct.assign. type

B

C

Procurement for stock Purchasing document(s) Item: no account assignment category

Warehouse Goods receipt

Goods issue

Material

Vendor

Production

Procurement for consumption Purchasing document(s) Item: with account assignment category

Goods receipt

Production

Vendor Material

Procurement Consumption-driven MRP

Consumption-driven MRP Requirements planning Net requirements calc. A Material

Lot sizing

Forecasting

Material master

Scheduling

Purchasing

Inventory management

Materials planning and control procedures Requirements planning

Consumption-based

Deterministic MRP

VM, VB

VV

Reorder point procedure

Stochastic

Stock level

Consumption

Time

Time

Reorder Point Procedure Lot size

Stock

Reorder level

Safety stock

Reorder point

Delivery date

Replenishment lead time

Time

Net Requirements Calculation in the Reorder Point Procedure Shortage

Purchase order proposal to the amount of the lot size

Reorder level Purchase order Fixed planned orders Fixed purchase requisition Warehouse stock

Comparison Comparison

Safety Stock and Reorder Level Stock

Reorder level

Daily x Replenishment lead time

Safety stock Replenishment lead time Service level MAD


Time

Net Requirements Calculation in Forecast Based Plng. Shortage Lot size Forecast requirements

Fixed inward movements e.g. purchase orders Purchase orders proposals Planned orders Purchase requisitions Warehouse stock

Comparison Comparison

Safety stock

Lotsizing procedures Exact lot size Static procedure

Lot sizing procedures

Periodic procedure

Fixed lot size Replenish to maximum stock level

Optimum procedure

Part period balancing

...

Groff procedure

Static Lot-sizing Procedures

Exact lot size

Quantity Inward movements Outward movements

Planned warehouse stock =  Fixed lot size

Replenish to maximum stock level

Time

Periodic Lot-sizing Procedures Quantity

Time Period length

Inward movements Outward movements

Period length

Dynamic Planning Calculation Req. x Price x Storage costs % x Time in storage Storage costs = 100 x 365 Price : Lot fixed costs: Storage costs percentage : Requirement date 06.07.1994 13.07.1994 20.07.1994 27.07.1994

Req. quantity 1000 1000 1000 1000

Lot size 1000 2000 3000 4000

$ 20 $ 100 10 % Fixed costs Storage costs 100

Optimum

0 38.36 76.71 115.07

Part Period Balancing Req. x Price x Storage costs % x Time in storage Storage costs = 100 x 365 Price : Lot fixed costs: Storage costs percentage : Requirement date 06.07.1994 13.07.1994 20.07.1994 27.07.1994

Req. quantity 1000 1000 1000 1000

Lot size 1000 2000 3000 4000

Fixed costs 100

$ 20 $ 100 10 % Storage costs 0 38.36 76.71 115.07

Optimum

Total storage costs 0 38.36 115.07 198.78

Least Unit Cost Procedure Req. x Price x Storage costs x Time in storage Storage costs = 100 x 365 Price : Lot fixed costs : Storage costs percentage : Requirement date 06.07.1994 13.07.1994 20.07.1994 27.07.1994

Req. quantity 1000 1000 1000 1000

Lot size 1000 2000 3000 4000

Fixed costs 100

$ 20 $ 100 10 % Storage costs 0 38.36 76.71 115.07

Total costs 100 138.36 215.07 330.14 Optimum

Unit costs 0.10 0.07 0.11 0.08

Scheduling in the case of external procurement Forward scheduling 11


Today + 1

22

GR processing time

Purch. order delivery date

t

MRP delivery date

Backward scheduling

22


Start / release date

11

GR processing time

Purch.order delivery date

t

MRP delivery date

The requirements planning process Planning mark-out

Process relevant to MRP

MRP

31.

1.

Material requirements planning

Order

Planned order Opening period of materials planning/ control

Purchasing


Purpose of the forecast A Material

MRP type

VM

VV

Forecast

Forecast

Reorder level Safety stock

Forecast requirements

Procurement Processing Purchase Requisitions

Purchase requisition Department MRP

Requisition

Requisition

Purchasing

Purchase requisition processing MRP

Direct entry

Purchase requisition Determine source of supply

Release

Vendor

o.k. Allocate and process RFQ

?

Purchase order

Release Release order order

Procurement Processing Vendor Inquiry / Quotations

Request for quotation/ quotation RFQ 1

RFQ 2

Requirements known. Procure from which source?

? Vendor 1

Quotation 1

Vendor 2

Quotation 2

Price comparison list

Purchase order

Rejection

Entering an RFQ 11

22

Item list Vendor 1

Inquiry 1

?

Vendor 2

Inquiry 2

?

Issuing output

Purchasing document

Output Printer

Reprint

EDI

Reminder

Fax

Rejection

Order acknowledgement check

11

Processing Quotations: Example Enter price and pricing conditions Vendor A Quotation for RFQ 1 Item 10 Gross price: 400/t Discount: $50

Vendor B Quotation for RFQ 2 Item 10 Gross price: 400/t Surcharge: 50%

Vendor C Quotation for RFQ 3 Item 10 Gross price: 400/t Fixed costs: $40

22 Compare quotations using price comparison list 350/t

Steel 2 t

480/t

520/t

450/t

Price Quotation 1

Quotation 2

Quotation 3

33 Create info record or reject quotation Vendor A - Order Mat. Qty Price Steel

2t

350/t

Vendor C, B - RejectionThank you for your offer. Unfortunately, we cannot place an order at this time .....

Mean value quotation

Procurement Processing Purchase Orders

Processing Purchase Orders Purchase requisition

RFQ

Reference document

Contract

? Order history

Vendor Purchase order

One-time vendor

Pcs Pcs

% %

Conditions Conditions

$$

Info record

Contract Contract request

Reference RFQ

Reference contract


Contract

Release order

11

22 Vendor

Scheduling Agreements Purchase requisition

RFQ

Reference scheduling agreement


Scheduling agreement

11

Einstellungen Einstellungen Schedule lines

Vendor

22

PROCUREMENT OF EXTERNAL SERVICES

Inventory Management/Valuation

Inventory Management Goods Movements

Inventory management Old system

Vendor

In-house production

Goods receipt

Transfer posting Warehouse 1

Warehouse 2

Goods issue

Scrapping

Consumption

Documents for goods movements Warehouse A Material

Goods movement

Material document

Accounting document

Material Valuation Levels Material valuation levels

0001

Company code

Plant Valuation area

Split Valuation: Structure Plant

Batch

0001

Material 1

Plant

Storage location

Valuation Valuation area Material Valuation category Quantity Mvg. av. price

Stor. loc. 0001 Quantity 30

Italy Quantity 10

Stor. loc. 0002 Quantity 70

France Quantity 20

0001 1 H 100 5.20

Valuation type Italy

Valuation type France

Quantity 40 V - price 4.00

Quantity 60 S - price 6.00

Italy Quantity 30

France Quantity 40

Updating the stock situation Stock situation On a quantity basis

On a value basis

Material master Special stocks

G/L accounts

Stock fields per plant, storage location and special stock

Debits and credits per company code, period and, possibly, business area

Entering material documents Material document item

Account determination Consumption update Movement type

Quantity update Indicator for printout Field selection

Analyses in inventory management Analyses

Stocks overviews Stock per material

Material movement list

Inventory control ABC-Analyses

Plant stock availability

Stock value

Reqs./stock list

Range of coverage

Warehouse stock list

Slow-moving items/ inventory turnover Standard analyses

Inventory Management Processing Goods Receipts with Purchase Order Reference

Purchase Order Views in Inventory Management Purchase order Header

Statistics General

Vendor Texts

$ Conditions Conditions Output 01/01/95 10/01/95 30/03/95

Items

Purchase order history

Schedule lines

Account assignment

Changes

Texts

Determining the purchase order during GR Goods receipt for purchase order Manual

Purchase Manuell order

Matchcode List of open purchase orders by - vendor - material - delivery plant

Stock types for goods receipt Goods receipt blocked stock Unrestricted-use stock Warehouse Vendor

Co n

su mp ti o

Stock in quality inspection Blocked stock

n

Account assignment object Cost center Order ......

Posting procedure for goods receipt (example) Stock account Stock value

GR/IR clearing

Price differences

(

)

Update for goods receipt

(

)

Inventory Management Processing Goods Receipt w/o Reference

GR w/o Reference to a Purch. Order or Production Order

Preplanning

without purchase order without production order

Goods receipt Initial entry of stock balance Without purchase order Without production order Goods receipt of by-products Delivery free of charge Returns from customer

Inventory Management Processing Stock Transfer / Transfer Postings

Transfer posting Transfer posting

Miscellaneous transfer postings

Stock transfer

From plant to plant

From storage location to storage location

From material to material

From QM to unrestricted use

From consignm. stores to warehouse

Valuation in the Case of Stock Transfer Issuing plant

Standardprice 2.00 Moving average price 2.00

Stock Stock plant plant 01 01 (( aa )) (( bb ))

200.00 200.00 200.00 200.00

100 pcs

(a) (a) (b) (b)

Expense Expense // revenue revenue from from stock stock transfer transfer 100.00 100.00

Receiving plant

Standardprice 3.00 Any moving average price

Stock Stock plant plant 02 02 300.00 300.00 200.00 200.00

Inventory Management Processing Goods Issues

Goods issues From warehouse Goods issue

Consumption

Issue

Cost center

Sampling

Asset

Scrap

Sales Order

From consignment stores

Effects of goods issue Material document

Stock quantity Consumption statistics ...

Accounting document

Point of consumption: Cost center Order ...

G/L account. Stock account Consumption account ... Goods issue Reservation Order

Warehouse mgmt: Transfer order Quality management: Inspection lot

Posting method for goods issue Stock account Stock value

Update on goods issue

Consumption account

Special Stocks and Special Procurement Types ❧ ❧ ❧ ❧ ❧ ❧ ❧ ❧

Consignment Subcontracting Stock Transfer with Stock Transport Order Third party processing Returnable Transport Packaging Pipeline handling Sales order stock Project Stock

Company’s Own Special Stock ❧ Stock of material provided to Vendor ❧ Consignment stock at Customer ❧ Returnable packaging stock at Customer

Company’s Own Special Stock Managed at plant level

Stock types ❧ Unrestricted use stock ❧ Quality inspection stock

Special Stocks ❧ ❧ ❧ ❧

Vendor Consignment Returnable Transport Packaging Sales order stock Project Stock

Special Stocks Managed at Storage location level

Stock Types ❧ Unrestricted Use stock ❧ Quality inspection Stock ❧ Blocked stock

Inventory Management Physical Inventory

Procedures ❧ ❧ ❧ ❧

Periodic inventory Continuous inventory Cycle counting Inventory sampling

Physical Inventory ❧ Can be carried out for Company’s own stock and Special Stock ❧ Inventory for Company’s own stock and Special stock must be taken separately in different physical documents ❧ Physical inventory can be taken for Unrestricted-use stock in the warehouse Quality inspection stock Blocked stock

Physical inventory Create physical 1 procedure Batch-Input inventory document Set blocking indicator

2

Batch-Input

3

Print physical inventory document

4 Physical inventory document 5 List of differences

Post differences

6

Arrange recount

5a

Change count

5b

Invoice Verification / Valuation

Types of invoice verification or

Purchase order Purchase order

or Vendor invoice

Goods receipt

?


Invoice verification environment

Purchase order

G/L accounts

Assets

---Goods receipt Material master

Vendor master

Conditions


Invoice document

Cost centers

Purchase order

Material master

Posting an invoice Invoice relating to purchase order

GR/R account

Post A XX

Doc. No. 51000123 Vendor GR/R

100100+

Vendor account

B XX

Material master Moving average price Value

Purch. order history Goods receipts Down payments Invoices

Variances Invoice Goods receipt

WE 40

Purchase order $5

Quantity

50 pieces Invoice

Price

at $6 Invoice 10 pieces

Goods receipt 10 10 pcs pcs == 200g 200g

= 250 g

Order price quantity

Purchase order = 2 kg 10 pieces at $20/kg

Invoice

Purchase order Planned delivery date 04/12/95

Invoice

10 pieces

= 2.5 kg

Date 26/11/95

Tax Material value + input tax

Company

Vendor

Material value +Tax on sales/ Purchases

KMT

A A

A

Customer

Tax payable

Tax office

Invoice receipt postings GR/R clearing

Input VAT

Stock account Stock value

(

) (

Vendor (control acct.)

Price differences

)

(

) (

)

Postings at Standard Price GR / IR clearing account

Stock account (2)

200.00

(3)

Exp. / revenue Price difference (2)

40.00

20.00

240.00

Vendor / general ledger

(3)

Event

240.00 (2)

220.00

Stock

Total value

Standard price

Moving av. price

(1) (2)

Initial situation GR for purch. order: 100 @ 2.40

100 200

200.00 400.00

2.00 2.00

2.00 2.20

(3)

IR for purch. order: 100 @ 2.20

200

400.00

2.00

2.10

Purchase order price

2.40 / pc

Invoice price

2.20 / pc

( 3)

Postings at Moving Average Price

Stock account (2) (4)

240.00 240.00

20.00 ( 3 ) 550.00 ( 5 ) 10.00 ( 6 )

Exp.. / revenue Price difference

GR / IR clearing account

(3)

240.00

( 6)

240.00

240.00 ( 2 ) 240.00 ( 4 )

Raw material consumption ( 5 ) 550.00

Vendor / general ledger

10.00 ( 6 )

Event

220.00 ( 3 ) 220.00 ( 6 )

Stock

Total value

Moving av. price

(1)

Initial situation

100

200.00

2.00

(2)

GR for purch. order: 100 @ 2.40

200

440.00

2.20

(3)


200

420.00

2.10

(4)

GR for purch. order: 100 @ 2.40

300

660.00

2.20

(5)

Goods issue: 250 @ 2.20

50

110.00

2.20

(6)


50

100.00

2.00

INVOICING PLANS

Facility to schedule Invoicing dates for planned procurement independent of goods and service receipts

Periodic Invoicing Plan

Partial Invoicing Plan

Account Determination Procedures for Automatic Postings in MM

Types of Account Determinations SD SD

FI FI CO CO

MM MM PP PP

R/3AM AM Client/Server QA QA PS ABAP/4 WF PS PM PM WF HR HR

MM

Movement Type based Transactions Non-Movement Type based Transactions

IS IS

SD

Cond. Technique

Grouping Organizational Levels forCase: Account Determination valuation area = plant Valuation grouping code

Plant

Company code

0001

0001

0001

0002

0002

0003

0003

0002

Chart of accounts

GKR

0004 0003

0005

0004

IKR

Grouping of Material Type Valuation Class

Material type

Account category reference

Valuation class

0001

7900

0002

3000 3010 3020 3030 3040

FERT HALB HAWA . . . ROH1

0003

ROH2

3100 0004

ROH3 ...

3200

Grouping of Materials for Account Determination Option 1: Option 2 ROH Mat 1

Acct. Acct. 11

Mat 2

HIBE Mat 3

Acct. Acct. 22

Mat 5 Mat 6

ROH

Mat 1 Mat 2

Mat 4

FERT

ROH

Mat 1 Acct. Acct. 11

HIBE Mat 3 Mat 4

Acct. Acct. 33

FERT Mat 5 Mat 6

Option 3

Acct. Acct. 33

Mat 2

Acct. Acct. 11 Acct. Acct. 22

Procedure Part 1: Value String - Processing Keys Invoice verification

Inventory Management Material

Invoice verification ? =

Value String

Transaction (Generalized

posting record)

BSX BSX

WRX WRX

300100 300100

191100 191100

Processing keys

G/L account number

KBS KBS

425000 425000

Procedure Part 2: Processing Key - Rules 1 Processing keys for debit/credit posting

Transaction

2

Processing Key (Transaction) Chart of accounts

Rules

Parameters on which account allocation depends

Procedure Part 3: Rules Account Allocation Processing Key (Selection of transaction) Selection of chart of accounts

(Valuation grouping code) (Account grouping code) (Valuation class)

Rules specify account determination key

Account number

Account Determination Procedure: Overview Type of Transaction

Movement type based Transaction

Non-movement type based Transaction

Material Master "Type of Material" Material Type

Step 1 or 2 Value Posting String

Plant

Qty. Posting String Account Categ. Reference

Company Code

Step 3

Processing Key (GBB)

Rules Account modification

Valuation Class

Val. Grouping Code

Processing Key (AUF) Step 4

Legend Information derived from Transaction type Information derived from Material Master Information derived from the organiz. Structure Main Customizing area

G/L Account

Chart of Account

1

Automatic Posting: Maintenance of the Settings Selection of the valuation grouping code

2 Selection of the posting transaction

3

Allocation of the G/L account number(s) per valuation class (and account grouping code)

SAP-MM Functional Overview

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