Material Management ERP-SAP

ERP-SAP

ERP-SAP

Prepared By: M. Imran TaseerMaterial Management (MM)1Main Functions(MM)

Material Master DataVendor Master DataPurchasingInventory ManagementLogistics Invoice VerificationPhysical InventoryMaterial ValuationMaterial Requirements Planning (MRP)External Services Management

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Organizational Structures3Inventory Management with a Warehouse Management Systemclient0001plantstorage location001warehouse number001storage type05-04-0300205-04-04storage binMMWMcompany code0001 ABC inc.0001 Jones inc.0002 Model Ltd.purchasing organization00010001000200030002000300040001000200030004distrib.-centerfactory(physical stock)44Here you can see an overview of the hierarchical structure including the objects of the warehouse management

IDES = exemplary company maintained in the SAP system

different Storage locations are assigned to a warehouse numberMaterial Master Data

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Material Master66Material TypesStandard Material TypesCustomized Material TypesROH (Raw Material)FERT (Finished Goods)HAWA (Trading Goods)HALB (Semi-Finished Product)ERSA (spare parts)

ZADM (General Materials)ZIT (IT Materials)ZSAT (Stationery Materials)ZAST (Asset Materials)ZSAM (Sample Material)7Create Material Master

88Create Material MasterMaximum Length of Material Code is standard 18 digits. Like 100000000000000018Maximum material description is 40 Characters.

99Create Material Master

1010Create Material Master (cont)



SAVE1313Vendor Master Data14invoice entryinvoice verificationpayment handling request for quotation quotation processing purch. order handlingStructure of the Vendor Master RecordGeneral datanameaddresscontrol dataaccounting databank accountacc. maintenancepaymentpurchasingterms and cond.partner functionscurrencyutilizationfor eachpurchasingorganizationclient wide orfor eachcompany codeclient widearea of validitysections1515different sectionsVendor Master Creation

16Vendor Master Creation (Cont)









25Purchasing/Procurement

26Procurement Process (Procure-to-Pay)Purchase RequisitionPaymentto VendorNotify VendorVendorShipmentInvoiceReceiptGoodsReceiptPurchase Order3-WayMatch27ECC 6.0January 2008 SAP AG and The Rushmore Group, LLC 200827This is a standard view of the procure to pay process and the most common. It may vary significantly based upon the company procedures, the products/services purchases and other factors. SAP allow businesses to tailor it to their needs.Starts with a requisition or need that needs to be filled. This can come from Planning (MRP), manually or otherThe purchase order is the document to fill the need: usually includes the vendor, cost/price, quantity, terms and other pertinent information. [ part one of the 3-way match]Notifying the vendorThe goods are shipped and brought to the organizationThe goods are received (typically at the dock) and then put away [ part two of the three way match]An invoice is received from the vendor [third part of the 3-way match]After the tolerances/verification of the 3-way match are met a payment is made according to the terms agreed to on the purchase order.Purchasing ProcessCreate a requisitionFirst release of requisition (approval) Create RFQ (Request for Quotation) with reference to requisitionCreate PO (Purchase Order) with reference to RFQApproval of PODepartment receives material ordered (GR)Department pays invoice (MIRO).

28Purchase 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.

29Request for Quotation Is a standard business process its 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)

30Purchase OrderBuyer-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.

31Create Purchase Requisition

32Create Purchase Order

33Procurement DocumentsRequisitionPurchaseRequisition

RFQRFQ

?QuotationRFQ

Purchase OrderPO

Service Entry SheetContractContract

Quotation

AB?

34Awarding Contracts (Order placement)PurchaseRequisition

RFQs

?Vendor C

Vendor B

Vendor AQuotation

BestOfferPriceComparisonlistPurchaseOrder

35Inventory Management36Inventory ManagementInventory list parameters (Physical Inventory)Movement types for differencesWarehouse ManagementMinimum and Maximum stock levels Re-order point

37Goods Receipt: Transfer posting

Unrestricted stock: You can consume the material stock in unrestricted use. Quality inspection: Area controlled by QM to inspect the quality of material. Blocked stock: is a holding area for materials that have not been posted to a companys warehouse stock.(Not available for use)

3838Physical InventoryAudit of inventoryCompare physical stock with stock appears in systemEnter physical inventory countInvestigates if stock mismatchBalance sheet effect

39Movement TypesThemovement typesare defined as 3-character field in system. It is used to describe the type of material movement that need to be performed. The movement type is used for all type of goods movement in SAP (receipts, issues, transfers, reversal).The predefined movement types in SAP is between 100 and 899. The movement type 900 and upwards can be used for customized movement types.Movement Types101 - Goods receipt (GR) for purchase order102 - GR for purchase order reversal122 - Return delivery to vendor123 - Reversal of return delivery to vendor

201 GI for cost center202 RE for cost center301 - Transfer posting plant to plant 302 - Transfer posting plant to plant reversalInvoice Verification42Invoice Verificationinputinformationinvoice verificationoutputinformationordersactions:

enter invoiceverify invoicepost invoiceupdaterelevant data(re-editinvoice)goods receiptmaster data:materialvendorsaccountsterms & cond.financialaccountingassetmanagementcost accounting4343Invoice VerificationWhen you post an invoice, an accounting document is created:Update Vendor accountUpdate the account GR/IR (Goods Receipt/Invoice Receive)Update master data: moving average price, valueUpdate purchase order history

4444Material Valuation45Material ValuationStock value = stock quantity x material price(If the stock quantity or the material price changes, the stock value changes)Standard priceMoving average price

46Material Requirements Planning (MRP)

47Material Requirements Planning (MRP)

The main objective of MRP is to guarantee material availabilityPlanning strategies - made to order or made to stockConsumption based planning methods (Forecast) or demand based planning methodsBOM, automatic PRs and POs48Service Management49Service ManagementService master dataService PRService POService Entry Sheet50