Introduction SAP R/3 – MM
Dr. Djamal Ziani
King Saud University
ERP-Software: SAP R/3
Sales and
Distribution
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Material
Management
Financial
Accounting
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Controlling
Components of Materials
Management
3
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
4
Organizational Structures
Organizational Structures
•
•
•
•
•
•
•
Client
Company
Plant
Valuation Area
Storage Locations
Purchasing Organizations
Purchasing Groups
6
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 smallest
organizational unit of external accounting for
which a complete, self-contained bookkeeping
system can be replicated.
• A company code represents an independent
unit producing its own balance sheet, for
example, a company within a corporate group
(client).
• Company code = 4 characters
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
9
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
10
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
11
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
material
group
purchasing organization
purchasing group MG 0, 3
purchasing group MG 1, 4
purchasing group MG 2, 5
purchasing group MG 6
plant
purchasing group MG 7, 8, 9
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 several
purchasing organizations.
Inventory Management with a
Warehouse Management System
0001 – ABC inc.
client
0001 – Jones inc.
company code
purchasing organization
plant
distrib.center 0001
storage location
0001
0001
0002
0002
0003
0002
storage bin (physical stock)
0003
0004
0001
0003
MM
factory
0004
001
warehouse number
storage type
0002 – Model Ltd.
001
WM
002
05-04-03
05-04-04
The Module MM – Main Functions
MM – interdependencies to other modules
Logistik
PP
production
planning
MM
material master
SD
sales and
distrib.
purchasing
requirements plan.
QM
quality
management
FI
financial acc.
inventory mgmt.
invoice verification
CO
controlling
PM
plant
maintenance
AM
fixed assets mgmt.
Basic Data
• Master records - include information about
1. vendors
2. material and services to be procured
3. the relation between 1. and 2. (purchasing info
record)
e.g. prices / terms and conditions
• bills of material for
–
–
–
–
production planning
purchasing
sales and distribution
withdrawal of Material
Structure of the Vendor Master Record
sections

utilization
General data
• name
• address
• control data
area of validity
client wide

purchasing
• terms and cond.
• partner functions
• currency
• request for quotation
• quotation processing
• purch. order handling

accounting data
• bank account
• acc. maintenance
• payment
• invoice entry
• invoice verification
• payment handling
for each
purchasing
organization
client wide or
for each
company code
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 AG
Germany, to create purchase orders and invoices
denominated in euros.
Create a Vendor
Procedure
1.Call up the transaction as follows:
Menu Path
Logistics  Materials Management
 Purchasing  Master Data 
Vendor  Central  Create
Transaction Code
XK01
.
Create a vendor
On the Create Vendor: Initial Screen, enter the following
data:
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
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
Create a Vendor
1. Choose
until you reach the Create Vendor: Accounting and
make sure that 160000 appears in the Reconciliation Account
160000 field.
2. Choose
appears.
until the Create Vendor: Purchasing Data screen
3. On the Create Vendor: Purchasing Data screen, check that the
order currency is EUR.
4. Choose
appears.
until the Create Vendor: Partner Functions screen
5. Choose
appears.
until the Create Vendor: Partner Functions screen
6. Choose
appears.
until the Create Vendor: Partner Functions screen
Create a Vendor
Create a Vendor
Create a Vendor
Views on the Material Master Record
each view is maintained by a certain user department of the firm







accounting: valuation- und calculation-specific information
requirements planning: information about material requirements
planning (e. g. reorder point)
purchasing: e. g. responsible purchasing group, order unit
engineering: technical information
storage: information about warehousing, material movements, ...
forecast: information about the forecasting of the material requirements
S & D: informationen about sales orders and price determination
Demo: Create Material Master
Demo: Create Material Master
•Select the views: Basic data 1, Purchasing, Purchase Order
text, Gl. Plant Data/Storage 1, Accounting 1
Demo: Create Material Master
Demo: Create Material Master
Demo: Create Material Master
Demo: Create Material Master
Demo: Create Material Master
Demo: Create Material Master
SAVE
purchasing info record
info record
prices
terms & cond.
PO statistics
tolerance levels
date
quotation
outline
agreement
order
Purchasing Process
PO
?
=
invoice
X
X
X
invoice verification
X
X
determination: requirements
vendor
X
X
X
X
outline agreem.
X
determination: source of supply
MM
goods received &
inventory mgmt.
vendor 2
vendor 1
PO
?
vendor selection
PO
PO
PO monitoring
purchase order processing
Create Purchase Order (PO)
vendor 2
purch. order
1
vendor known
terms & cond.
2
vendor not known
source list
purch. order
outline
agrement info record
vendor
vendor 2
3
assigned purchase
requisition exists
(from user department)
purch. req.
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 to
order, 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 on
specific 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 the
descriptions, quantities, prices, discounts,
payment terms, date of performance or
shipment, other associated terms and conditions,
and identifies a specific seller.
Create Purchase Requisition
Create Purchase Requisition
Create Purchase Requisition
• In the item, enter your material, Plant= 1000, QT = 100
Create Purchase Requisition
• Save your Purchase requisition
• Take note of Purchase requisition number
Demo: Create Purchase Order
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)
Demo: Create Purchase Order
Demo: Create Purchase Order
• Enter your vendor, and price 30 euro and save
Posting an Order Entry (Goods Receipt)
Logistics
PP
production
planning
MM
purchasing req. planning
goods receipt
SD
sales and
distrib.
inventory mgmt.
goods issue.
QM
quality
management
FI
financial acc.
inventory
controlling
transfer
posting
invoice
verification
CO
controlling
PM
plant
maintenance
AM
fixed assets mgmt.
Demo: Posting Order Entry (Goods Received)
1. Use T_code : MIGO
2. Select Goods Receipt
3. Select Purchase Order
4. Enter PO number for goods to be received.
5. Hit "Enter"
Demo: Posting Order Entry (Goods Received)
6. Enter Document date & posting date
7. Enter Header text (comment) if necessary.
8. Close detail data.
Demo: Posting Order Entry (Goods Received)
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
Demo: Posting Order Entry (Goods Received)
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 item
12. Input actual quantity (3 & 2 pcs ).
13. Hit "Enter"
Demo: Posting Order Entry (Goods Received)
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 Verification
input
information
orders
goods receipt
master data:
material
vendors
accounts
terms & cond.
invoice verification
output
information
actions:
•
•
•
•
enter invoice
verify invoice
post invoice
update
relevant data
• (re-edit
invoice)
financial
accounting
asset
management
cost accounting
Create Invoice
Create Invoice using Tcode MIRO
Enter the Required details in all
Tabs
Enter the Purchase order no. and click on Enter,
to display the material details.
Create Invoice (contd..)
Click the check box, to calculate the Tax
Create Invoice (contd..)
Enter the Amount and click on save
Create Invoice (contd..)
Invoice is created
Demo: Invoice Verification
Using the tcode: MIRO"
Demo: Invoice Verification
Demo: Invoice Verification
net amount for
positions