1 R/3 STRUCTURE OF SAP....................................7 CLIENT – SERVER BENEFITS..................................7 BUSINESS TRANSACTION...................................... 7 BUSINESS FRAMEWORK........................................ 7 BAPI.................................................... 8 2 ENTERPRISE STRUCTURE....................................9 CLIENT.................................................... 9 COMPANY CODE.............................................. 9 PLANT..................................................... 9 STORAGE LOCATION.......................................... 9 VALUATION AREA............................................ 9 PURCHASE ORGANIZATION..................................... 9 CENTRALISED PURCHASE ORGANIZATION......................10 PURCHASING GROUPS........................................ 10 3 BASIC PROCUREMENT PROCESS (GENERAL)....................11 Flow..................................................... 11 Purchasing value Key..................................... 11 Item Category............................................ 11 ZERO VALUE POs........................................... 12 Changeability of PO...................................... 12 Invoicing Plan........................................... 12 Reporting................................................ 13 Analysis of Order Values.................................13 4 MASTER DATA............................................ 14 VENDOR MASTER............................................ 14 ACCOUNT GROUP of a Vendor..............................14 Vendor Reconciliation account..........................14 Pre-requisite for Vendor Partner roles.................14 Controls of Document type..............................15 Payment terms..........................................15 Inco-terms............................................. 15 Text types for central Texts...........................15 Text types for Purchase Organization Texts.............16 MATERIAL MASTER.......................................... 16 MATERIAL NUMBER........................................16 MATERIAL TYPE..........................................17 Material filed selection reference.....................17 INDUSTRY SECTOR........................................18 Unit of measure........................................18 Page 1 of 217 Classification: Confidential
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1 R/3 STRUCTURE OF SAP............................................................................................7CLIENT – SERVER BENEFITS.......................................................................................7BUSINESS TRANSACTION............................................................................................7BUSINESS FRAMEWORK..............................................................................................7
3 BASIC PROCUREMENT PROCESS (GENERAL)...................................................11Flow..................................................................................................................................11Purchasing value Key.......................................................................................................11Item Category...................................................................................................................11ZERO VALUE POs..........................................................................................................12Changeability of PO.........................................................................................................12Invoicing Plan...................................................................................................................12Reporting..........................................................................................................................13Analysis of Order Values..................................................................................................13
ACCOUNT GROUP of a Vendor................................................................................14Vendor Reconciliation account.....................................................................................14Pre-requisite for Vendor Partner roles..........................................................................14Controls of Document type...........................................................................................15Payment terms..............................................................................................................15Inco-terms.....................................................................................................................15Text types for central Texts..........................................................................................15Text types for Purchase Organization Texts.................................................................16
MATERIAL MASTER....................................................................................................16MATERIAL NUMBER................................................................................................16MATERIAL TYPE.......................................................................................................17Material filed selection reference.................................................................................17INDUSTRY SECTOR..................................................................................................18Unit of measure.............................................................................................................18Accounting View..........................................................................................................18
5 PROCUREMENT OF STOCK MATERIAL...............................................................19PURCHASING – GENERAL..........................................................................................19
Data in MM Purchasing....................................................................................................19Master records in Purchasing........................................................................................19
RFQ / QUOTATIONS......................................................................................................20Creation of RFQ...........................................................................................................20Quotation processing....................................................................................................21Conditions in Purchasing..............................................................................................21
PURCHASING INFO RECORD.....................................................................................21Info update indicator.....................................................................................................22Info update scenarios....................................................................................................22Structure of Info Record...............................................................................................23
Changeability after the start of a release procedure......................................................27MANUFACTURER PART NUMBER............................................................................27VENDOR EVALUATION...............................................................................................28
6 PROCUREMENT OF CONSUMABLE MATERIALS..............................................31Stock Vs Consumable.......................................................................................................32Purchase Requisition for Consumable Material...............................................................32Procedure for SPLIT VALUATION - transactional........................................................32BLANKET PURCHASE ORDERS.................................................................................32
7 EXTERNAL SERVICES PROCUREMENT...............................................................34Service Master..................................................................................................................34Master Records in Service Management..........................................................................35Maintaining Service Conditions.......................................................................................35Standard Service Catalogue..............................................................................................36Model Service Specifications...........................................................................................36Account assignment in services........................................................................................36Global Percentage Bidding (GPB)....................................................................................36
USER PARAMETER – EVO...........................................................................................46ORDER ACKNOWLEDGEMENTS...............................................................................46EVALUATED RECEIPT SETTLEMENT (ERS)...........................................................47
10 MATERIAL REQUIREMENT PLANNING...........................................................48Pre-requisites for MRP.....................................................................................................48MRP RPOCEDURES – Overview...................................................................................49CBP Vs MRP....................................................................................................................49Consumption Based Planning (CBP)................................................................................49ONLY ONCE INDICATOR............................................................................................49PRIORITY FUNCTION...................................................................................................50MRP Types.......................................................................................................................50MRP relevant data in material master..............................................................................50PLANNING RUN............................................................................................................51
MRP run types..............................................................................................................51Planning sequence........................................................................................................51Planning types...............................................................................................................51Planning File.................................................................................................................52
CONTROL PARAMETRS OF MRP...............................................................................52MRP area..........................................................................................................................53Preparation of MRP run with MRP areas (in CUSTOMIZING)......................................53PROCESS FLOW during PLANNING RUN..................................................................54Stock- Requirement List ( Transaction code – MD04)....................................................55MRP List (MD05).............................................................................................................55Customizing for MRP.......................................................................................................55MRP area..........................................................................................................................55LOT SIZING PROCEDURE............................................................................................56
Types.............................................................................................................................56RE-ORDER POINT PLANNING & EVALUATION.....................................................56Procurement Proposal or Order Proposal.........................................................................57Re-Order Point Planning...................................................................................................58Calculation of Dead lines..................................................................................................58
11 INVENTORY MANAGEMENT.............................................................................59MOVEMENT TYPE........................................................................................................59Valuated Good Receipts...................................................................................................59Stock types........................................................................................................................59Stock Indicators are the indicators for differentiate between stock types on goods receiptNegative Stock..................................................................................................................59STOCKS...........................................................................................................................60Stock Transfer Vs Transfer Posting..................................................................................60Material Document Vs Accounting Document................................................................61EFFECTS OF A GOODS RECEIPT................................................................................61Stock Overview................................................................................................................61ENJOY Transaction – MIGO...........................................................................................62GR of Blocked Stock (Movement type –103)..................................................................62Goods Receipt in to QI stock (101 +X)............................................................................63OTHER GOODS RECEIPTS...........................................................................................63
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DELIVERY COMPLETED INDICATOR......................................................................63RETURN DELIVERY.....................................................................................................64Difference between Reversal & Return delivery..............................................................64Movement type –161........................................................................................................65Quantity Distribution facility at GR.................................................................................65Goods Receipt using Order Price Unit.............................................................................65Entering a Freight Vendor at Goods Receipt....................................................................65
Pre-requisites................................................................................................................65Goods Receipt of Non-valuated goods.........................................................................65
Automatic PO generation.................................................................................................65SHELF LIFE EXPIRATION DATE (SLED) check at GR..............................................66Dynamic availability Check.............................................................................................66Activation in Customizing for Plant & Movement types are required for.......................67Missing Parts Check.........................................................................................................67Multiple account assigned GRs........................................................................................67GR Forecast......................................................................................................................67RESRVATION.................................................................................................................67
Structure of Reservation Screen...................................................................................68Important points while creating/ changing a reservation..............................................68Reservation Management Program (RMP)..................................................................68Customizing settings for Reservations.........................................................................69
INITIAL STOCK ENTRY...............................................................................................70GOODS ISSUE................................................................................................................70BACK FLUSH..................................................................................................................71GR/ GI SLIP numbering...................................................................................................71Goods Movement via Shipping........................................................................................72
MATERIAL BLOCK (ENQUEUE) for Goods Movements............................................72STOCK DETERMINATION...........................................................................................73Returns to Vendor.............................................................................................................74STOCK MOVEMENTS-TRANSFERS...........................................................................74
Stock Transfer Vs Transfer Posting..............................................................................74Levels of stock Transfer...............................................................................................74
12 SPECIAL PROCUREMENT TYPES......................................................................78CONSIGNMENT PROCESS...........................................................................................78
Process of Consignment Procurement & Settlement....................................................79Process of Physical Inventory of Consignment............................................................79
SUBCONTRACTING PROCESS....................................................................................79Process of Subcontracting Process...............................................................................81Purchase requisition and PO for Subcontracting..........................................................81Providing components for existing Purchase Orders....................................................82Subcontracting in Inventory Management (Facilities).................................................82
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STOCK TRANSFER USING STOCK TRANSFER ORDER....................................83GENERAL –INFORMATIONS ON STO...................................................................86THIRD PARTY PROCESSING...................................................................................87
Implications of Third Party Processing in SALES...........................................................88Implications of Third Party processing in PURCHASING..............................................88Implications of Third Party processing in Inventory Management..................................88RETURNABLE PACKING (RTP) PROCESSING.........................................................88PIPLINE MATERIAL PROCESSING............................................................................89SALES ORDER STOCK.................................................................................................89PROJECT STOCK...........................................................................................................90
14 VALUATION AND ACCOUNT DETERMINATION...........................................94Procedure for SPLIT VALUATION - transactional......................................................105NON-VALUATED STOCK MATERIAL (UNBW).....................................................106RETURNABL TRANSPORT PACKAGING MATERIALS (RTP).............................106
15 INVOICE VERIFICATION...................................................................................107BASIC INVOICE VERIFICATION PROCESS............................................................108INVOICING PLAN........................................................................................................111PO BASED INVOICE VERIFICATION.......................................................................111GR BASED INVOICE VERIFICATION......................................................................112TAXES in INVOICE VERIFICATION.........................................................................112CASH DICOUNT in INVOICE VERIFICATION........................................................112FOREIGN CURRENCY in INVOICE VERIFICATION..............................................113VARIANCES AND INVOICE BLOCKING.................................................................113
1. VENDOR SPECIFIC TOLERANCES...................................................................1132. INVOICE BLOCK TOLERANCE LIMITS..........................................................1143. PURCHASE ORGANIZATION LEVEL..............................................................1174. AT GOODS RECEIPT...........................................................................................117
BLOCKING VARIANCES............................................................................................117INVOICE REDUCTION................................................................................................119VARIANCE WITHOUT REFERENCE TO AN ITEM................................................120
1. TOTAL BASED INVOICE REDUCTION............................................................1202. TOTAL BASED ACCEPTANCE..........................................................................1203. VENDOR SPECIFIC TOLERANCE LIMITS......................................................121MANUAL ACCEPTANCE........................................................................................121
INVOICE VERIFICATION OF CONSUMPTION MATERIALS...............................12216 GENERAL INFORMATIONS on LIV..................................................................13017 RELEASE PROCEDURE......................................................................................14118 BATCH MANAGEMENT.....................................................................................14319 CLASSIFICATION................................................................................................144
Elements of Classification..............................................................................................14420 PRICING PROCEDURE........................................................................................146
Time dependent conditions.............................................................................................146
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Maintaining TD Conditions............................................................................................146CONDITION TYPES.....................................................................................................147ACCESS SEQUENCE...................................................................................................150EXCLUSION OF CONDITIONS..................................................................................150
Define Condition Exclusion.......................................................................................150Condition records in Condition Tables...........................................................................151PRICING PROCEDURE (Calculation SCHEMA)........................................................152SCHEMA DETERMINATION......................................................................................153INFO RECORD and ORDER PRICE HISTORY..........................................................153HEADER, GROUP & ITEM CONDITIONS................................................................153
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1 R/3 STRUCTURE OF SAPReal time 3 tier architecture
CLIENT – SERVER BENEFITS
1. Presentation Server 2. Application Server3. Database Server
Presentation Server Application Server Database Server
R/3 structure system architecture allows separating application from presentation and Database. So the load distribution is possible at 3 different levels.
Because of R/3 structure, Scalability (No of users) increases. This scalability provides with flexibility when choosing hardware and software.
BUSINESS TRANSACTION
Is a sequence of dialog steps that are consistent in a business context and that belong together logically.
A business object composed of Tables that are related in a business context, including related application programs
Attributes can be modified by the methods that belong to the business object.Business objects are maintained at Business Object Repository (BOR)
Maximum number of sessions we can open in SAP R/3 is Six
BUSINESS FRAMEWORK
- Business framework portrays the R/3 system as a family of product made up of separate integrated components.
- Business Framework architecture woks using business components that are configurable software modules and it offers the enterprise a flexible business infrastructure.
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Ie. The enterprise software can react quickly to business demands and can be changed or enhanced simply without disturbing the flow of business.
BAPI- Business components react with business frame work architecture via Business
Application Program Interface (BAPI)- Business Framework architecture is the strategic product architecture of the R/3
system.- BAPI is a well defined interface providing access to processes and data of business
application system.- BAPI is an entry gate to R/3 system- Functions of BAPIs are
1. Create Objects2. Display attributes of objects3. Change attributes of objects
- A BAPI is assigned to One and ONLY one business object
- Using Business framework technology, SAP provides its customer with a platform to configure and connect business processes and information flows across all components of the business frame work, also across physically separated components.
- Benefits of Business Frame work architecture are :1. Ability to easy changes and configure dynamically and independently2. Easy integration with Internet.3. Simple connection between R/3 and third party (non-SAP) software.
2 ENTERPRISE STRUCTURE
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CLIENT
Is a commercial Organizational Unit within R/3 system with its own data, Master records and set of tables.
- It is the highest level element of all Organizational unit- Represented by 3 digit alphanumeric key
COMPANY CODE
It is the smallest Organizational unit within R/3 system for which can have an independent accounting department within external accounting. Legal entity
- It is having balance sheets, Profit & Loss accounting required by the law- Represented by 4 digit alphanumeric key.
PLANT
Is an organizational logistic unit that structures the enterprise from the perspective of production, procurement, Plant maintenance, Material Planning
- It can be a branch office/ Central delivery ware house/ HQ/ Maintenance Plant.- Represented by 4 digit alphanumeric key
STORAGE LOCATION
Is an Organizational unit that allows the differentiation of material stocks within the Plant
- Inventory management on quantity basis is carried out at storage location level.- Physical Inventory is also carried out at storage location level.
VALUATION AREA
Is an organizational level at which material is valuated. - R/3 system recommends Plant level- Valuation at Plant level is mandatory if you are using Production planning/ CO/
Retail system- Valuation area selection is a fundamental setting in customization and very difficult
to REVERSE
PURCHASE ORGANIZATION
Is an organizational level that negotiates conditions of purchase with Vendors for 1 or more Plant.
- It is legally responsible for completing purchasing contractsCENTRALISED PURCHASE ORGANIZATION Should be attached to Company Code or otherwise Plant specific (attached to Plants). We can have cross-company code OR Cross-plant Purchase Organizations
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PURCHASING GROUPS
Is the key for buyer or group of buyers responsible for certain specific purchasing activities (eg. Mech/ Elect, etc.)
Organizational Unit – Organizational grouping of an enterprise.Transaction – Application programs which executes business processes in R/3 systemDocument – Data record generated through a transactionMaterial Master – Central data object in SAP R/3 system.
Configuring is the method of doing customizing CONFIGURE to CUSTOMIZE
3 BASIC PROCUREMENT PROCESS (GENERAL)
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Flow
1. Determination of requirements2. Source determination3. Vendor selection4. Purchase Order processing5. Purchase Order monitoring6. Goods Receipt7. Invoice Verification8. Payment processing (FI)
Purchase Order : A formal request to Vendor to supply certain goods / services under the stated conditions
When we enter an invoice against a PO/ GR, the system checks the price, rate, payment terms with respect to Purchase Order and Quantity w.r.to GR
While entering the GR, system checks whether the material is as per PO or not w.r.to Quantity, Shelf life, etc.
Several GRs can be entered for a PO item in one operation
The type of Invoice verification (PO Based / GR Based ) is to be fixed in PO , Invoice Tab
If MRP Procedure is set, PR will be generated automatically during MRP run.
Purchasing value Key
for auto-reminders and supply tolerances. It is fixed in the purchasing view of the material master. It is managed at CLIENT LEVEL.
Info update Indicator is set in material data of Purchase Order/ Quotations/ Outline Agreement (Item Tab)
Item Category
Defines whether an item requires or can have - A material number- An account assignment- Goods Receipt- Invoice ReceiptItem categories displayed depends upon DOCUMENT TYPE (fixed in customizing)- Standard – Blank – materials that are procured externally- Subcontracting – L – Finished product ordered from a Vendor (maintained at
STORAGE LOCATION level)- Consignment – K – Vendor makes the material available and manage a
consignment stock (maintained at PLANT Level)
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- Stock Transfer – U –- Third Party – S –- Text
MANDATORY REQUIREMENTS (GENERAL) Material Account Stock Goods InvoiceITEM CATEGORY Number Assignment Receipt Receipt Standard BLANK YES YESConsignment K YES YES YES Subcontracting L YES YES YESStock Transfer U YES YES YES Third Party S YES YES Limit/ Blanket B YES YES
ZERO VALUE POs
Generally used for samples. But generally used monitoring the delivery. FOC indicator is set in item level. Invoice receipt is cancelled because of this tick
Variable Order unit can be specified in material master record and purchasing info record.
In PO, Inco-terms are specified at Header levelShipping Instructions can be at Item and header level (As a Text in header level and Delivery tab at item level)Delivery instructions can be at Item and header level. (In texts tab)
Changeability of PO
1. If PO is already sent to Vendor – CAN change the PO and send a copy to the Vendor
2. If Vendor is delivered material against PO – Only LIMITED changes like texts are possible (We can not change qty)
3. If Goods received and payment made – NO changes possible.
Invoicing Plan
System creates invoice automatically as per Plan and release them for payment For automatic settlement for periodic invoicing plan, ERS must be selected in
Vendor Master In partial invoicing plan, provision of down payment in the Billing or Invoicing
plan rule date
HOLD function is available for a PO while creation
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Reporting
1. Creating and running reports2. Adjusting List analysis3. General analysis
Analysis of Order Values
1. Total Analysis2. ABC analysis3. Analysis using comparison periods4. Frequency analysis
ON HOLD POs are considered as incomplete and NOT available for analysis
Role – describes a set of logically linked transactionsActivity groups (User Roles) – have to be set-up using the profile generator so that the users of the SAP system can work with user specific or position related menus
4 MASTER DATA
VENDOR MASTER
Vendor Master Data is maintained at- General - CLIENT LEVEL INFORMATIONS
Addresses- Company code level – COMPANY CODE LEVEL INFORMATIONS
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Accounting related - Payment terms, payees,- Purchasing Organization level -
Related to purchasing – Currency, Inco-terms, VSR, etc
We can BLOCK a Vendor Master Record (XK05) - CompleteIf we want to block a Vendor for a SPECIFIC MATERIAL done through SOURCE LIST – ME01
Automatic PO generation is in purchasing data.
ACCOUNT GROUP of a VendorControl functions of Vendor account group are –
1. Status of the Vendor ( One time Vendor or routine vendor)2. Field selection in the Vendor Master Record3. Partner schemas4. Vendor Sub range5. Type of number assignment (external or internal)
Single Master Record is maintained for one time Vendor – Account group is CPDOther routine vendors are generally in LIEF
Vendor Reconciliation accountIt’s a G/L account which maps Company’s liability towards several vendors.Depending on account grouping selected, system assigns a number (can enter manually also). This Vendor number is used in sub-ledger number in Financial Accounting.When posting an invoice, system uses the reconciliation account automatically from Vendor master record.
A vendor account code is created against Company code and Purchase Organization, so its account is unique in all Plants under the Company code.
Pre-requisite for Vendor Partner roles1. Vendor master record for each partner separately2. Specified in customizing – Partner roles selected
Controls of Document type- Screen sequence and screen layout (Screen variant)- Number ranges of document
Payment termsThe control functions with payment terms are:1. Day Limit - Day of the month up until which the corresponding terms are valid.
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For terms of payment which depend on whether or not the baseline date is after or before the 15th of the month, you can define a two-part payment term under the same terms of payment key. The terms of payment key is expanded by the day limit entered here. Thus there are two entries in which different terms can be specified.ExampleThe following terms of payment require you to enter a day limit:Documents with an invoice date on or before the 15th of the month are payable on the last day of the next monthDocuments with an invoice date after the 15th of the month are payable on the 15th of the month after the next month.
2. Base line date calculation. – We can fix the base line date. The options available are fixed day and additional months3. Default payment block and method of payment4. Default base line date. It can be –No default/ posting date/ document date/ entry date5. Indicator for installment payment
Inco-terms International Commercial termsWe can make a mandatory requirement of location entry for an inco-term
Text types for central TextsIn this step, you define the text IDs for the "general" part of vendor master records. Text can be entered in the master records for each text ID, enabling you to store information on the vendor in the master record.
Actions1. Enter a text ID.2. Enter the name of the text type.3. Select the "Text relevant" indicator. The text is offered when a vendor master record is maintained or displayed.To enable a vendor text to be adopted in a purchasing document, proceed as follows:4. Choose Text for <purchasing document> -> Define text types and copying rules for header texts.5. Then specify for the desired text type(s) which text is to be copied from the vendor master record.
Text types for Purchase Organization TextsDefine Text Types for Purchasing Organization TextsIn this step, you define text IDs for the part of vendor master records that applies to specific purchasing organizations. You can enter a text giving information on the vendor for each text ID when you maintain master records.
Actions1. Enter a text ID.2. Enter the name of the text type.
3. Select the "Text relevant" indicator. The text is offered when you maintain or display the purchasing data of a vendor master record.To enable a vendor text to be adopted in a purchasing document, proceed as follows:4. Choose Text for <purchasing document> -> Define text types and copying rules for header texts.5. Then specify for the desired text type(s) which text is to be copied from the vendor master record.
MATERIAL MASTER
Material Master is structured for various organizational levels.
Data at CLIENT / COMPANY CODE LEVEL (table – MARA)Data Valid for the total Company. Basic dataMaterial No., Material group, Unit of measure, Conversion factors, Purchasing value key, etc
Data at COMPANY CODE LEVELAccounting Data, Costing data if valuation is at Company code
Data at PLANT LEVEL (Table – MARC)Purchasing data, MRP Data, Scheduling data, Forecasting Data, etc.
Data at STORAGE LOCATION LEVELStorage bin, picking area, etc.
MATERIAL NUMBER 18 character alpha numeric key
- Basic data is CLIENT SPECIFIC- Some Purchasing data are PLANT Specific – Pur group, GR processing time, etc.- Purchasing Value key is maintained at CLIENT LEVEL- If we are not specifying a Plant at Organizational level, only data at higher level
(Client) will be displayed- Language selection is additional data of Material Master.
The standard system uses a BUFFER when assigning numbers to the material master recordsThe amount of numbers for the buffer is 10. Using this buffer and having the material number assigned before saving a new number, the master can be lead to a gaps in the number assignment. However if you reset the number level of an interval back to the initial value, R/3 system fills these gaps when you create the new materials
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MATERIAL TYPEMaterials with same characteristics are grouped together in Material types- Raw Material, Finished Goods, etc.Represented by 4 digit alphanumeric codes
Material type is having following CONTROL functions1. The type of number assignment (Internal or external)2. The permitted number ranges3. Screen layout and screen sequence4. User specific views5. Procurement type (Internal / external)6. Up-dating of Quantity and Value in master records / FI7. Account determination on goods movements8. Price control
Material type CANNOT be changed for materials whose Purchase Order is made.Special Material types available in std SAP
Additionals (VKHM) - requirements like effective presentation to CustomsEg. – Care labels
Advertising media (WERB) – presentation for advertising. Eg. – leaflets/ catalogues Apparels (MODE) Empties (LEER) – Type of RTP generally subject to deposit of money. Can have
several components together in BOM. Eg. – empty bottle/ empty crate, etc. (SD) Full Products (VOLL) – counter part of empties. Operating supplies (HIBE) – Procured externally and required for the manufacture
of other products. Packing Materials (VERP) – Transport with goods/ come with goods of FOC. It is
managed at quantity and value in Material master even though it is free of cost. Used in HU management
Material filed selection referenceA reference control key defines which control string applies to the relevant influencing factorWe can maintain reference key for
1. Material type2. Plant3. Industry sector in customizing
Filed selection group Grouping of master records according to the filed option (Hide/ Display/ Optional/
reqrd. entry) Field selection against TRANSACTION is also to be defined for filed option Link rules of each transaction against the material type SAP defined link rules CAN NOT be changed Screen/ views can be customized as per Company code
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INDUSTRY SECTORRepresented by 1 digit alphanumeric keyThe control functions of Industry sector are
- Screen selection and its sequence- Industry specific fields
If we assigned a material to an Industry sector, we CANNOT change it later.Unit of measure
- Base unit of measure- Purchasing Unit, Sales Unit, Issue unit- Order Price Unit (OPu)
Main fields in Purchasing View are- Purchasing Value key- Automatic PO Selection- Source list requirement- Quota Management
Accounting ViewValuation Class – determines to which stock accounts are to be updated on goods movementsPrice Control – Standard or Moving Average PriceValuation of material depends on the price control set in Material Master.Standard Price – All stock postings will be at standard price and in case of any deviation posting the difference to Price difference accountMoving Average Price (MAP or v) GR valuation will be at PO price and Goods Issue at Moving average priceMAP updates on goods movements.In case of any difference with respect PO price, the difference amount will be posted to the stock account (on total stock at that moment). If sufficient stock is not available to distribute, system will post the difference to Price difference account.
Extending/ adding a View to an existing material master – MM50Then select the required view, Select
B – AccountingD – MRPE – PurchasingK – Basic DataC – ClassificationG – CostingA – Work Scheduling
5 PROCUREMENT OF STOCK MATERIAL
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PURCHASING – GENERAL
Centralized Purchasing With one Purchasing Orgn1 Purchase Orgn > responsible for a number of Company codes
Distributed Purchasing Number of Purchase Orgn for different Plants1 Purchase Orgn responsible for 1 Plant
Company specific1 Purchase Orgn responsible for 1 company code
Reference Purchase OrganizationPre-requisites for reference purchase organization:
1. Both the purchase organizations (reference and normal) are to be maintained in Organization structure
2. The reference purchase Orgn can be maintained WITH or WITHOUT Company code and Plant
3. Assign reference purchase Orgn as Reference purchase orgn in customizing
Data in MM Purchasing
Material Master – 1. Client related data 2. Plant related data 3. Storage location related data
Vendor Master – 1. General data 2. Company code related data(accounting) 3. Purchasing related data
Master records in Purchasing1. Purchasing Info Record2. Source List3. Quota Management4. Conditions5. Vendor Evaluation
The linking of document type made in customizing (in purchasing) are: Document type to allowed item categories Allowed item categories to Link PR document type
The conditions dependencies on time (TD & TID) are fixed at document type level at customizing.
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PURCHASE REQUISITION
PR can be created – Manual, or Auto from PP/ PS/ PM/ PPCTexts from externally created requisitions (PS/ PM/) are adopted in the item text of PR in purchasingPurchase requisitions are processed by item-by-itemPR can be created for material with master record and without master record also. But if it is without master record, it will be with Account assignment and Text & material group
PR changeabilityBefore changing PR, check
1. Already PO is issued or not – If issued, NOT changeable2. Already released or not (release procedure) – If released limited changes possible.
Depend on changeability indicator3. Created by MRP – NO Changes possible (Quantity can be chnaged while
processing. But the left out will shown as open against the same PR)
Flagging of PR items are “CLOSED” The item of a PR is regarded as closed, if the requested quantity is ordered in a PO If we are creating PR manually, the items will not be considered in MRP.
RFQ / QUOTATIONS
Single document for RFQ and QuotationCan be created with respect to:
Manual Via reference document Reference to PR Reference to Outline Agreement
RFQ/ Quotations are Created and maintained at purchasing Organization level.For RFQ – NO COMPANY CODE / PLANTCollective Number: For linking a number of RFQs. It is in the header of RFQ.It is a 10 digit alphanumeric number.
Creation of RFQInitial screen – Quotation deadline, Purchase Orgn & Purchase group are fixedHeader details – Collective number is assigned, Vendor addresses are maintained.Item overview – Material, Qty & deadline for each itemWe cannot enter an account assignment in RFQ
Quotation processing Vendor’s price and price conditions We can enter the prices and conditions of each vendor in RFQ. Comparison list
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We can save the quotation data in purchasing info record by giving the tick in check box ‘Info update’
We can set the rejection indicator for unsuccessful vendors. The mean value of all quotations can be saved as ‘Market Price” in the quotation
comparison list. This market price will be used as the basis for valuating the price level of a vendor and is called up during Vendor Evaluation.
Conditions in PurchasingConditions can be maintained for – Contract/ Sch. Agreements/ PO level. Conditions can be maintained in Info record. There are extended conditions also.
PURCHASING INFO RECORD
Info records are created for 1. Standard2. Subcontracting3. Pipeline4. Consignment,
Where the system copies the data in purchasing Certain concise information of a Vendor and material. If we are not maintaining Material in Info record, system will store this information
against a material group. Info record contains :
1. Current and future price with pricing conditions for Plant/ Purchase organization
2. Delivery date and tolerance limits. Availability period – During which, vendor can supply the material
3. Details of the Vendor & Vendor evaluation data and VSR. We can fix a regular Vendor here.
4. Texts that can be maintained for Info record, which can be called up in PO5. Number of last Purchasing document/ PO (In Purchasing data 2)
We can fix the PO text in Info record1. If only info record text is to be fixed in PO, set NO M text option2. If you are not selecting the above option, system will display both the texts
in PO Info update indicator WILL NOT update the info record. It will update the
information. The updated details can be seen at Info list (ME1L/M/P) These data will be displayed as default data while creating the purchasing
documents. It can be edited at purchasing document level. Info record can be created- manually- automatically from Quotation / Outline agreements / Purchase orders, if info update
indicator is selected while creation
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If you want to maintain conditions in Info record, you have to maintain it MANUALLY.
Auto-updated info records will NOT BE HAVING the pricing conditions (ONLY final price will be retained)
Info update indicator If we are fixing this info update indicator, system will copy the data and conditions maintained.If we fix
A – System will update the data WITH or WITHOUT PLANTB – System will update WITH PLANTC – System will update WITHOUT PLANT
For Quotations/ Contracts/ Scheduling Agreements and Conventional POs- If BLANK selected, Info record will not be updatedo A – If an info record exists at Plant level, it is updated. Otherwise, info
record at Purchase Organization will be updatedo B – If Plant conditions are allowed for the Plant, an info record at Plant got
updatedo C - IF Plant conditions are not necessary, for the Plant, info record at
Purchase Organization level will be updated.
The info update Indicator can be set at POIf we fix
BLANK – No updateTICK – System will update the info record as per the settings in Customizing ( node –Conditions > Define condition at Plant level)BLANK – Conditions allowed WITH or WITHOUT PLANT+ - Only PLANT BASED Conditions will be updated
- - NO-PLANT BASED CONDITIONS are allowed. For Enjoy transactions (PO- ME21N)
If just one (With or without Plant) exists, record will updated. If NO info record exists, PLANT Level info record will be CREATED If 2 info record (1 with Plant and 1 without Plant) exists, WITH PLANT info record
will be updatedInfo update scenarios1. If Info record already exists
1. Quotation – Time dependent conditions and other supplementary conditions are adopted
2. Scheduling Agreement – Is set as last document. Order price history is updated3. Contract – None4. Purchase Order – Is set as last document. Order price history updated
2. If Info record NOT exists1. Quotation – Time dependent conditions and other supplementary conditions are
adopted
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2. Scheduling Agreement – Is set as last document. Order price history is updated3. Contract – Time dependent conditions and their supplementary conditions are
adopted4. Purchase Order – Is set as last document. Order price history updated
Structure of Info Record1. General Data – Vendor data, Order unit, etc.2. Purchasing Organization Data 1 –
Control data – Delivery time, Minimum quantity, etcPrice & Conditions – Gross price, discount, etc.Statistics – PO History, PO statistics, etc.Text – Texts are maintained here, can be called up in PO
3. Purchase Organization / Plant Data Control, Price, statistics, texts
4. Purchase Organization data 2 Here you will get the reference document number on which the info record is created/ updated. This option is available only if the record is created with reference to a purchasing document.In other words, if an info record is created manually, the last PO data will be updated in Info record at purchasing data 2
Purchasing Info Record is valid for PLANT / PURCHASE ORGANIZATION While creating a PO, system first search for info record with PLAN&PURCHASE
ORGANIZATION combination for price, if it is not available in the system, it will search for data with PURCHASE ORGANIZATION only.
Purchasing Info record is suggesting prices in 2 ways :a. Conditions – conditions are included, if info record is prepared manually.b. If info record does not contain conditions, then the system will select the
price of last Purchase Order. We can define the conditions of last PO by customizing
a. Are always copiedb. Not to be copied when prices are entered manuallyc. Never copied
Info Record CANNOT be deleted by normal archiving program run. It can be deleted by the system administrator
Data can be displayed from Info record screen through ENVIRONMENT are Material Vendor RFQ/ Quotation QM Info record Last Document Quotation price history Order price historyThrough EXTRAS we can display
Administrative data Source List Taxes
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Vendor Evaluation Statistics
We can reach Buyers Negotiation sheet (for Vendor & Material) from Info record We can have 4 different info record for a material & vendor – for standard/ Consignment/ Subcontracting/ Pipeline
TEXTS
Header Texts: Header Text/ Header memo (Internal)/ Supplementary textsItem Texts - Item Text (CAN copy from Info Record/ Material Master)
- Delivery Text
Inserting texts from material master record
3 options of linking material master record and purchase documents.Relevant settings are to be made in each TEXT TYPE in customizing. The indicator in the status column shows the nature of linkage.
Option 1 - The Text is copied . Indicator status in column – NONEIt is then independent of the text in Material Master. Changes in the text in Material Master have NO INFLUENCE on the text in the document.
Option 2 - The Text is displayed only. Indicator status column – NText can not be adopted
Option 3 – The Text is offered for copying. Indicator in status column – XIt can be copied via Header or itemThe path is Texts > Adopt text (in requisitions) Go to > Texts > Adopt text.The changes made in material master will also be adopted in the document until such time as you can copy the text.
The customization available for each purchasing document. PO/ PR/ Contract in following nodes
- Define Text type for header Text- Define copying rule for header text- Define text type in Item text- Define copying rule for item text
We can copy a text from a Vendor master to any of the purchasing document.The procedure is as followsText types for Purchase Organization TextsDefine Text Types for Purchasing Organization TextsIn this step, you define text IDs for the part of vendor master records that applies to specific purchasing organizations. You can enter a text giving information on the vendor for each text ID when you maintain master records.
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Actions1. Enter a text ID.2. Enter the name of the text type.3. Select the "Text relevant" indicator. The text is offered when you maintain or display the purchasing data of a vendor master record.To enable a vendor text to be adopted in a purchasing document, proceed as follows:4. Choose Text for <purchasing document> -> Define text types and copying rules for header texts.5. Then specify for the desired text type(s) which text is to be copied from the vendor master record.
CONDITIONS
Are stipulations agreed with vendors concerning prices, discounts, surcharges, etc..
We can create conditions in - Quotations- Info Records- Outline agreements- Purchase Orders
Conditions in PO are TIME INDEPENDENT and others are Time DEPENDENTSystem will ask for VALIDITY for TIME DEPENDENT conditions.
Time dependent Time IndependentConditions Conditions
1. Info Record YES NO2. Quotation Depends on Doc Type Depends on Doc Type3. Sch. Agreement Depends on Doc Type Depends on Doc Type4. Contract YES NO5. Purchase Order NO YES
We can specify both time dependent and Time Independent conditions at Header level and Item level EXCEPT Info Record. The setting is at Document level
In Info record, conditions are stored at Info record level. For Time Dependent conditions, we can create
1. Supplementary conditions2. Validity Periods3. Scales4. Upper and Lower Limits
If we are creating a new condition type, should be assigned to an access sequence to link with Pricing Procedure
If the conditions are on header level of the document, then it is applicable for items in that document, but if it is at item level, it is applicable for that particular item only.
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Conditions in Purchase Order DEPEND on DOCUMENT TYPE.Conditions are prepared in a PO are at the level of document type
Conditions can be created for a Vendor/ for a Plant/ for Purchasing.Header conditions – Applicable for all items as per % or ValueItem conditions – applicable for specific items - % or ValueGroup conditions – Applicable to all items but distributed proportionately as per the quantity/ value
CONDITION TECHNIQUE
Up to 3.1H version, Time independent conditions are referred as Document conditions and Time dependent conditions are referred as Master conditions.
Condition Type and condition category - Example
Condition category Assigned to condition type (Std system)
H- Base Value PB00 (this must exist in all pricing procedure except stock transfer)
Standard pricing procedure in SAP is RM000 used for Purchasing
Purchase Requisition Prices
If the material is WITH material master record, the price will be displayed for Purchase requisition from the material master, even if we are maintaining a separate price in Info record. But the vendor will be populated from the Info record.
If the material is WITHOUT material master record, we have to maintain the price manually during the creation of PR, if required.
While preparing RFQ, DO NOT mention/ indicate Plant so that the same RFQ can be referred for other plants also.
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VENDOR CONFIRMATIONS
Vendor confirmations can be of Order acknowledgements Loading or Transport confirmations Shipping Notifications
ASN – Advanced Shipping Note
If the order conformation types are customized, and it is MRP relevant, it appears in Stock Requirement List.
We can post Goods Receipt against acknowledgement, if permitted entries are assigned in Customization – Confirmation Control
We can enter a confirmation in PO or SA We can have an EDI arrangement with Vendor, against EDI acknowledgements are
checked for Quantity, Date and Price Partial acknowledgement through EDI updates the PO/ SA possible We can do dunning procedure through confirmation control key and we can fix the
mandatory days for confirmations. Pre-requisite – Conformation Control KEY
RELEASE PROCEDURE
Release procedure can be WITH & WITHOUT ClassificationRelease procedure WITHOUT Classification is available ONLY for PR
Class & CharacteristicsMaximum 8 release codes are allowed in a Release procedure
Changeability after the start of a release procedureCase 1 – Insignificant changes – NOT required a fresh release (below the value limit)Case 2 -Significant change with % limit – No fresh release, if correct the POCase3 – Significant changes – New Fresh release required
MANUFACTURER PART NUMBER
Pre-requisites1. Settings in Customizing2. Creation of Material Master record with material type HERS3. Define Manufacturer part profile4. Create master record for manufacturers/ Plants5. PO should be with MPN material6. Info record7. Texts in PO can be maintained
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VENDOR EVALUATION
Vendor Evaluation is done at Purchase Organization level It uses the master data of
1. Material Master2. Vendor Master3. Purchasing Info Record
Main Criteria & Sub-criteriaMain CriteriaPrice, Quantity, Services are generally used main criteria
Over all Score of Vendor
Main criteria
Manual
Semi-auto Auto
Sub criteria (At Info Record Level)
Scoring range is defined in customizingWeighting keys – 2 Types – Equal weighting & Distributed weightingSub-criteria in NOT having any weighting keys
Calculation type – Manual/ Semi auto/ Automatic – for sub-criteriaIn automatic calculation, we have to define sub-criteria for each main criteria otherwise system can not calculate the overall score.
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1 2 3
1 2 3
a b c a b c
In Manual scoring score for sub-criteria are entered manually and calculates the score of main criteria accordingly (maintain Vendor evaluation transaction – ME61)
In semi automatic scoring, user enters the scores of sub-criteria via info record and the system calculates the scores of sub-criteria as per the setting and populates the score of main criteria. Transaction Code – ME63
In fully automatic scoring, scores of the sub-criteria will taken from Info record(no manual entry) and that will populate to sub-criteria and finally to main criteria. Transaction Code – ME63
ProcedureWe can maintain a maximum of 99 Main criteria and 20 Sub-criteria for a Vendor Evaluation resulting to a combination of 1980 combinations for vendor evaluation
Step1: Define Weighing keys- Different Weighing keys are required if we want to consider different weighing (%) for a set of criteria to be evaluated while maintaining vendor evaluation for different kind of vendors. Like Service vendors, RM vendors etc. Here we create weighing keys as per our requirement.Standard are 01-Equal weighing; 02-Unequal weighing
Step2: Define Criteria: Define the criteria by which the system computes scores for vendors. 99 criteria allowed. SAP recommends a maximum of 8
Then go to sub criteria of particular criteria and define the sub criteria applicable for that. Specify the scoring methods whether they are manually, semi-automatically, or automatically. There are particular scoring methods defined in standard system for standard sub criteria. By these scoring methods only the system will be able to calculate the scores for the specified period. The maximum no. of sub criteria allowed for main criteria is 20.
Step 3: Define scope list: scope lists are defined for usage in generation of ranking lists for vendors. System will consider the sequence list of main criteria mentioned for a scope list. ie. Weightages are considered in that sequence while ranking.
Step 4: Define purchasing organization data for Vendor Evaluation
Include your purchase organization in the list, and then go to details. Mention the best score (100 possibly) and Applicability period (the past period which should be considered for vendor evaluation by the system). If any factory calendar is there attach here.
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Step 5: Go to main criteria of your organization. Here you have to mention what are the main criteria you are considering for your P Org from the list of total main criteria.Ticking the manual Maintenance enables to enter the score manually for the main criteria while maintenance of vendor evaluation for a particular vendor (if required)
Step 6: Go to Sub criteria of a main criteria. Here you divide the % of total weightage for a criteria among sub criteria according to your choice (if it 1.1.2 then it is 25%, 25%, 50%).Tick manual maintenance to provide option for a manual maintenance while maintaining Vendor Evaluation.
Step 7: Weighing for your purchase organization.Here you mention how the weightage is given to particular main criteria for a given weighing key (for all the weighing keys created by you.)
According to this only the total weightage(say 100) is distributed among various main criteria for particular weighing key.
Step 8: Point scores for the main criteriaHere points are allocated according to variances for automatic sub criteria. System will give points to sub criteria according to this, during processing the data for evaluation.System defined will be there.
Easy Access:Mater Data should be maintained through the below path to start the vendor Evaluation process for the particular Vendor.Logistics/Materials Management/Purchasing/Master Data/Vendor Evaluation
1. Maintain – ME61: Here we enter the Vendor code and Purchasing Organization2. Then enter the corresponding weighing key and press enter ,you will see the
weightings allocated for main criteria3. Now go to Edit on the screen and click the auto new revaluation. The system
calculates the scores and gives the overall score. Save the same.4. You will have the option of changing the scores manually for criteria and sub
criteria if you have set the same while configuration. Once you have changed manually and press enter the scores will get updated then save the same.
5. ME 63 – Automatic New evaluation: Here you can do automatic evaluation without going to ME61.But you cannot do any manual corrections in this case.
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6 PROCUREMENT OF CONSUMABLE MATERIALS
Account assignment category determines which category of accounts is to be debited in G/L accounting.
Categories are:A – AssetK – Cost centreP – ProjectF – Production OrderC – Sales OrderU – Unknown
Consumable materials that are procured directly for consumption against an account assignment object
It is NOT managed in value based in Inventory management System updates the consumption in material master, if master data is available. Examples are NLAG/ UNBW/ DIEN
If we select consumable material as material type in Material Master, it controls - Procurement type (Internal / External)- Account postings- Requirement in Inventory Management
Consumption is directly posted to consumption accountInventory Management is NOT based on Value basis
Stock Vs Consumable
Stock Consumable1. Entry of Material Number Required Possible but not required2. Account assignment not required Mandatory3. Account postings to Stock account Consumption account4. Mat. Master up-dation Qty, Value& Qty & Consumption
Consumption are updated5. MAP Adjusted Not applicable
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Purchase Requisition for Consumable Material
Can be by manual or though automatic- through MRP run/ PM order/ Sales order Can use account assignment U (Unknown) in PR. But to be confirmed in PO If material master is available, system will take the price from it otherwise we have
to enter manually. Multiple account assignment is possible in PR
BLANK – No multiple account assignment1 – Distribution on Quantity basis2 – Distribution on Value basis.
Goods Receipts are NON-VALUATED for consumable goods.
Procedure for SPLIT VALUATION - transactional
1. While creating the material master select valuation category and save it.2. Again go to Material master, while entering system will ask for Valuation type in
accounting view. Enter the valuation class, price and save.3. Again go to material master and repeat the procedure for 2nd valuation type.4. The valuation type for each valuation category is fixed in customizing
BLANKET PURCHASE ORDERS
Used for procuring consumables and services Validity is a must. Generally for longer periods. Fixed at Header level Limits at item level Purchase Order document type FO (Framework Order) is used for this. Invoice receipt is periodic and settled for each invoice NO Goods Receipt or Service Entry Sheet Account assignment is NOT Mandatory while creating PO- U (Unknown) can be
used in PO Item Category – B is used Multiple account assignment is permitted while Invoice verification Validity periods are checked by the system during Invoice verification Can be linked with Budget control PO History is updated ONLY after Invoice verification If the limit of a PO is increased during the invoice verification, system allows the
postings BUT blocked for payment on “variance” reason
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7 EXTERNAL SERVICES PROCUREMENT
Procurement cycle – Flow1. Determination of requirements2. Creation of service specification3. Source Determination4. Vendor selection5. RFQ (Bid evaluation)6. Comparison of Quotations7. Creation of service Order8. Purchase Order monitoring9. Service Entry10. Service acceptance11. Invoice verification12. Release of Payments
Service Master
Master record creation- description of service, UoM, etc. Can attach price through conditions Conditions can be maintained at - At Service level (Market price/ Estimate)- At Service and Vendor level- At service, Vendor and Plant level
Service is procured for direct consumption. Account assignment ‘U’ (Unknown) is accepted at PR level, not in PO Materials are procured at Item Level, but Service is procured BELOW item level. Item category ‘D’ is used for Service POs Provision of unplanned expenses and total limit at item level Release procedure is possible for Service Entry Sheet Service Entry Sheet is made with respect to PO Invoice verification also done with respect to PO PO History is updated after Invoice verification Service Entry sheet updates FI/ CO. Complex service specification can format through outline levels Can assign any number of service lines to each item level AC03 – Creation of Services, ML 81N – Service Entry Sheet
2 ways of specifying services 1. As a Planned Service – With description/ Qty/ and Price2. Unplanned service – With Value & limits
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Master Records in Service Management
1. Service Master Record2. Master Conditions for Services3. Standard Service Catalogue (SSC)4. Model Service Specification (MSS)
In Service Master Record, we fix the information like – Service No., Service category, Description, Basic UoM, Material group, Valuation class, etc
In master conditions of services, Terms of Payment, Validity period, Scales, Supplementary conditions. It can be maintained in Master records/ contracts & in purchasing documents
Header conditions CAN NOT be maintained in RFQs and SES
In contracts we are allowed to maintain header conditions for the FIRST outline level. These are copied to all outline levels and CANNOT be changed
In case of PR/ PO, conditions are UPDATED for a SERVICE. But for Quotation and PO, the service Master conditions are updated for a Vendor
WITH or WITHOUT PLANTIn customizing (Source determination & default values), we can set the following indicators for the Client & purchase Organization level.
1. For CLIENT Service condition update indicator –
- as default in PR- as default in Quotations- as default in POs
2. For PURCHASE ORGANIZATION Set service condition update indicator – Quotations Default in POs
Maintaining Service Conditions
1. In Service Master2. In purchasing documents3. Updating conditions in Master record through conditions in
purchasing documents. Condition Update indicator for Purchasing document is set in
customizing
Standard Service Catalogue
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Details to Service type, service type to SSCWe can transfer external SSC to R/3 system which is having same Unit of Measure.
Model Service Specifications
For PRs to purchase organization, Fixed Vendor, Contract through configuration
External Service Procurement is also can have:1. Release procedure2. Value limits for unplanned services3. Vendor evaluation4. ERS
Service specifications can be created for 1. Purchasing documents2. SES3. MSS4. Maintenance Service Plan5. WBS element / Project plan6. Sales Order
WE CAN NOT MAINTAIN LIMITS IN RFQ/ QUOTATION/ CONTRACTS
The difference between MSS and SSC isWe can copy services from both to service orders, but if we copy from SSC, we can not edit it, but in case of MSS we can select and edit it
Account assignment in services
Specifying the account assignment for the services at the time of their initial procurement is optional. Account assignment category is at document item level.-‘U’ (Unknown is accepted
- Multiple account assignment is accepted- Distribution is also possible
Invoice verification of services (SES)
In Vendor master we have to specify, GR based IV/ ERS/ Service based IV
Global Percentage Bidding (GPB)
It is a procedure of bidding used in procurement of external services ONLY.Pre-requisites are
1. Document type AB in RFQ2. Calculation schema – MS0002 (with condition types –KR01 –
header discount & KZ01 – Header Surcharges
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Process1. Create RFQ with document type –AB.
Maintain price per service and send to Vendors2. Vendors will not quote any price for each service, But they will indicate a %
addition or Deletion with respect to the price shown in RFQ.This % can be at Per Outline level or for the uppermost outline level (total)
- INVOICING PLAN and BLANKET POs are possible with Services
OUTLINE AGREEMENTS
It’s a long term purchasing agreement with a Vendor concerning the supply of materials or the performance of services according to the pre-determined conditions.These are valid for a certain period of time and cover a pre-defined total purchase QUANTITY and VALUE
Outline Agreements - 1. Contracts a. Value (WK)b. Quantity (MK)c. Centrally agreed Contractsd. Distributed Contracts
2. Scheduling Agreementsa. LAb. LPAc. LU
Contracts are with Release Orders and Scheduling agreements are with Delivery schedule
Release Order is a Purchase Order reference to a Contract
CONTRACTS
NO DATES PR > RFQ > Contracts (manual) VALIDITY PERIOD is to be indicated in the Header In Quantity contract, the target quantity and purchasing conditions are to be
maintained for EACH item Item category M & W are permitted in Contracts (M- Material Unknown & W-
Material group)
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Item category M – Similar materials with SAME PRICE, but different material numbers. Material numbers are to be specified in release order.
Item Category W – Material belonging to the same material group, but with DIFFERENT PRICE.
W can be used in VALUE CONTRACTS ONLY M & W are NOT ALLOWED in Release Orders Account assignment –U (unknown) is permitted in contracts but NOT in release
orders Release order documentation contains the statistics for an item. It is updated
automatically and used for monitoring the contract Single and multiple account assignments are allowed in contracts
Centrally agreed contracts – For many Plants in a purchase organization. In this case DO NOT MAINTAIN PLANT. In this case individual release orders can be issued Plant-wise against the contract. Partner functions are also possible.Using Plant conditions, we can specify separates prices and conditions for each receiving Plants.
Distributed Contracts (DK) – Contracts at different Plants operating on different (ERP) systems which are accessible through ALE
SCHEDULING AGREEMENTS
Long term agreement with a vendor to supply material as per pre-defined condition. Pre-defined PERIOD and QUANTIRY (NO VALUE) PR > RFQ > Scheduling Agreement. Centrally agreed S.As can be prepared. M, W and U are not allowed in Scheduling Agreements Details of delivery date and quantity are maintained through Delivery schedules Schedule line can be created automatically through MRP run, but for this
1. Define Scheduling agreement as a Source of supply for the material.2. Auto schedule line selection source list Select option 2 in MRP Column (in Me01)3. Auto schedule line must be allowed in MRP system
Types of Scheduling Agreements:1. Type LA – Document type - LP
Agreement + Delivery Schedule2. Type LPA – Document type – LPA
3. Type – LU – Stock transfer scheduling agreement
FRC (forecasting) Schedule gives a medium term overview of requirements
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JIT Schedule gives the requirements in near future. JIT schedule can be prepared daily/ Hourly basis.
Release documentation requirement is SET by fixing release documentation indicator in Customizing
For JIT scheduling, JIT is Indicator to be set in Material Master record We can post a Goods receipt against a scheduling agreement directly in MIGO
Creation Profile1. Optional data from Vendor master record2. Release creation profile is for each scheduling item3. It is customized on a Plant specific basis4. It determines the periodicity of SA release and aggregation of schedule line
quantities5. Tolerance limits are in release creation profile (RCP) and set it during
customizing
Aggregation schedule – Total scenario in a specific time periodFirm, Trade off & Planning Zones –
1. FIRM ZONE – Immediate – Vendor can go ahead with manufacturing. The Purchaser is liable for total quantity
2. TRADE OFF ZONE – Near future requirements. Vendor can go ahead with mobilization of requirements. But the liability is limited to the purchased raw materials/ semi finished goods
3. PLANNING ZONE – No liability by the Purchaser
Firm and trade off zones details are forwarded to the Vendor along with FRC and JIT Schedules for getting more clarity of Scheduling Agreement.The procedure isA. At IMG level –Maintain release creation profile against your Plant. Here you are going to maintain 1. General Parameters like Creation strategy for JIT & FRC Schedules2. Aggregation Horizon – Daily or monthly aggregation in Days for both JIT & FRC3. Creation periodicity – Daily/ Weekly/ Monthly for JIT & FRC4. Tolerance profile, etcB. Transaction level 1) Create Scheduling Agreement – ME31L. Attach the creation profile in the Scheduling Agreement at Item > More functions > Additional dataPlease see that the Material Master is having tick for JIT Schedule & 2) Maintain Delivery schedule – ME 38 3) Create the release documentation – ME84. Select FRC & JIT Schedule and process and see that FRC and JIT Schedules are created4) If you want to see the schedules, go to ME9E
SOURCE DETERMINATION
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Source can be a Vendor or an Outline agreement.By Source list, we are defining preferred or allowed sources for a material.By Quota, we are specifying the share of total requirement over a specified PERIOD from each SOURCE.
Source determination at PR level If the material is with master record, during creation of PR, Prices will be taken
from the material Master, EVEN IF, we maintain a different price in Info record. But the vendor will be selected from Info record
Case. Source list is maintained for Vendor A & Info record is for Vendor B
While creation of PR, system will select A as the source, if the source list selection is opted in the material Master, otherwise, B will be selected.
For fixing a Vendor in a source list, the info record for that Vendor is TO BE maintained.
If we have maintained a source list for a material we have to select that Vendor for placement of PO. So check the requirement display before maintaining a Source list for a material.
INFO RECORD is a MUST for automatic source determination at PR level. Source determination function is available ONLY for PR
SOURCE LIST
Allowed/ Preferred/ Blocked sources of Supply for a MATERIAL in a PLANT for a PERIOD (Validity)
MRP Indicator in Source list considered while material Planning If source list requirement is defined at Plant level, then system will not allow
creating a purchasing document without Source list. Source list can be for a Material (at Material Master) or Plant (at customizing) Source List analysis – List out materials which are NOT having source list in the
Plant ONLY ONE FIXED Source is allowed fro a material within a Validity period Source list can be maintained –Manually/ From Outline Agreement / From
Purchasing Info Record/ Automatic generation. Source list can be made referral (of another material) If the selection of source list is auto, we can have single or collective procedure.
Can be from Out line agreement/ Info record We can create a Source list for a MATERIAL GROUP (for contract – W) EXCLUSION INDICATOR – Set for excluding a source in the source list
QUOTA ARRANGEMENT
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The Quota indicates the % age of total requirement that are to be procured from each of the various sources over a CERTAIN PERIOD OF TIME.
Validity period is mandatory for Quota arrangement Quota can be provided for various procurement types Quota arrangement indicator is to be fixed in Material Master and is defined in
customizing to update quota allocated quantity progressively Quota arrangement is NOT suggested, if the quota allocated quantity>= maximum
quantity Quota rating = (Quota – allocated quantity + Quota base quantity)/ Quota Qr = (Q-Qa +Qb)/ Q The source with lowest quota rating represents the effective source (even ZERO) If more than one sources having quota rating zero (or equal), the one with highest
quota is the effective source. Quota base quantity is used for regulate the new entry of a Vendor in Quota
arrangement (Give him a higher quota base quantity on entry to quota)Quota Splitting (ONLY through Planning Run)
If a PR is created manually is subjected to quota arrangement, the requirement WILL NOT split.
Splitting among different sources is carried out, if a Lot size procedure for which the splitting quota indicator has been set is assigned to the requested material in Material master. This will be achieved through the Lot size procedure. For all lot size procedures, quota will not split. Set at customizing. The quota splitting indicator is set for each lot size procedure as per the requirement in Customizing.
The order dictated by Quota can be OVERRIDE by PRIORITY INDICATOR Priority Indicator prioritizes among the quota The prioritization is fixed in Quota screen Splitting of Quota is through planning run ONLY and for lot sizing procedures,
which is having quota splitting
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If the quota allocated quantity and quota rating have NO SIGNIFICANCE if the quota is SPLITTING.
Lot sizes are calculated on the basis of quotas. We can view Quota arrangement from MRP list (MD04)
Minimum splitting quantity - The residual quantity above which only quota splits. The quantity below this quantity, system will assigns a single source
Maximum quantity – Quantity that can be allocated to a source. If the allocation reaches this quantity, system will not consider this as a source.
If the requirement crosses the maximum lot size, system proposes several lots with maximum lot size.
The minimum and maximum lot size maintained in Quota arrangement item, OVERRIDES the entries in the material Master record on preference and are valid solely for the assigned source.
The minimum and maximum lot size maintained in Material Master applicable to ALL SOURCES
The PRIORITY in Source determination1. Quota Arrangement (First which is having priority in Quota)2. Source List3. Scheduling Agreement/ Contracts4. Info record
System carries out source determination during Planning run PR items that have been assigned a source of supply can be converted to PO with
function of “automatic generation”, provided selection of Automatic PO in Material Master and Vendor Master.
If a material is NOT having master record, the MATERIAL GROUP is considered for source determination
We can block a Source at Vendor Master (XK05) If we want to block some materials/ services of that Vendor, we have to block these
items at Source list (ME01) For suggesting source during the creation of PR/ PO/ OA, The Source List + Info
Record to be maintained In SPRO we can fix quota arrangement usage indicator depending on our
requirements on purchasing documents (PR/ PO/ OA/ Prodn Order/ MRP or its combinations)
QUOTA is NOT relevant, if we are using MRP
Regular Vendor - Supplier/ Source at corporate level – CLIENT LEVELFixed Vendor can be specified in Source List – PLANT LEVEL
Regular vendor is set in General data of Info record, so we can not fix another vendor as a regular vendor in Source List or Quota Arrangement
The quota arrangement indicator defines the quota usage combinations in the functionalities in
1. In Purchase Orders
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2. In Scheduling agreement delivery schedules3. In Planned orders4. In Purchase requisitions &
REPORTING
o Analysis of master data and documentso SCOPE OF LIST parameters determine which data is for a Document (eg. BEST
for PO)o Scope of list parameters are set in Customizingo We can fix variants for frequently used parameters
Logistics Information System (LIS)SAP logistics offers a range of application oriented information system with standard interface. All LIS have same type of data retention.Examples – SIS (sales), PURCHIS (Purchasing)
OLAP
Data Warehouse
OLTP
OLAP – On Line Analytical Processing (Business Intelligence)Data Warehouse – StructureOLTP – On Line Transaction Processing (LIS updating)
In OLTP information can be from any systemIn OLTP – Analysis and report level
Reporting in LIS - Standard analysis – ABC analysis/ classification- Advanced analysis technique- EWS (Early Warning System)
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- Flexible AnalysisReporting – Types
1. Standard Reports – In-built in SAP R/3 system2. Reporting via info systems – LIS/ FIS, etc3. Reporting via info systems with separate data base and toll – EIS/ BIW
The physical Tables in SAP Information system are information structures. They have a typical structure. The object is to be analysed in real business scenario, go to info structures as evaluation groups in the form of characteristics.In statistical information, one characteristic, such as Vendor / customer/ material is segregated. Organizational elements such as valuation area/ Plant/ Pur group/ storage location are also used as characteristics in info structures. Time base is an important option in aggregation. The system updates the logistics key figures for each characteristic combination and periodicity.
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8 AUTOMATED PROCUREMENT PROCESSES
Purchase Purchase Goods InvoiceRequisition Order Receipt Receipt
Material Automated Shipping ERSPlanning PO Notification
- Material Master Auto PO indicator Order ackn. ERS Indicator in- Source List in Indicator in Vendor master- Sch. Agreements V. Master PO (GR based IV)
M. MasterInfo record
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9 OPTIMIZED PURCHASING
No RFQ/ QTN/ Comparison
MRP
User Depts.
Sources from source list, Price from Info record.Available functions of optimized purchasing are:
1. Ordering of assigned requisitions2. Automatic PO generation3. Assignment & processing requisitions4. Ordering with source determination.
The transaction ME25 (PO for Vendor Unknown) is used for optimized purchasing. We can generate automatic PO through this transaction
Pre-requisite for automatic PO generation for optimized purchasing are – Selection of Automatic PO in Vendor Master record & Material master record.
If you want to have storage location data to be defaulted from Material Master, in MRP2 view, enter a storage location in the filed “storage location for EP” (EP-External Procurement). This will be defaulted in PO. But we cannot default a storage location against a document type.
USER PARAMETER – EVO
Allows to specify default values for certain fields and functions for each user It is done at customizing using parameter ID. (ID EVO)
USER PARAMETER (EFB) Allows defining authorizations for certain functions during purchasing. Done at customizing. Parameter ID – IDFEB It can control complex purchase functions and allows the delegation.
a) Parameter NDR = X (upper case letter!) has the effect that the Print indicator is always set when you enter a goods receipt.b) Using parameter ND9, define the individual user groups for printer determination by plant/storage location/user group.
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Purchase Requisition
MaterialQuantityDelivery DateSOURCE
Source ListQuotaVendor evaluation
PURCHASE ORDER
Vendor
PRICE
INFO RECORD
c) Output device in the fixed values (for print parameter S)
ORDER ACKNOWLEDGEMENTS
Vendor acknowledgements – Allows more precise planning. Can set conformation Control key in the PO at item level. We can configure type of acknowledgements If it is specified a certain order acknowledgement, Goods receipt CAN NOT be
posted with out confirming it in PO We can post GR with respect to these order acknowledgement selected in the PO.
EVALUATED RECEIPT SETTLEMENT (ERS)
If vendor is not submitting the invoice/ invoice is not available, we can create invoice within the system by ERS and we can settle the invoice
It is created against a Good receipt. Invoice and message to the vendor is created by the system
We CAN NOT process PLANNED DELIVERY COSTS with ERSPre-requisites for processing ERS are
1. Selection in Vendor Master2. Info record selection3. GR based IV4. Tax code of PO and Info record should be the same5. Customizing – Selection of ERS for the company code
ProcedureCreate PO with the material and VendorEnter GRGo to MRRL for ERS
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10 MATERIAL REQUIREMENT PLANNING
Production Reservations Depts. requirementsOrder
S&D Processing
IndependentRequirements
Demand Mgt.Material Planning
Planned Order
DirectConversion
Purchase Requisition
Purchase Order/Agreement
MPS – Master Production Scheduling
Pre-requisites for MRP
1. MRP should be activated for that Plant (In customizing)2. Set-up Planning file (In customization)3. Maintain MRP data in Material Master (Valid MRP types & Valid material status)
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MRP RPOCEDURES – Overview
MRP MRPProcedures
Consumption basedPlanning
Re-order point Forecast based Time basedPlanning Planning Planning
Manual Automatic
CBP Vs MRP
- In CBP, Sales orders, planned independent requirements, etc are not considered- In MRP, Sales orders, planned independent requirements are direct requirements
Consumption Based Planning (CBP)
Used in areas WITHOUT in house production/ Manufacturing (external procurements only).
Is based on historical data and uses material forecasts & statistical procedure to determine future requirements
DO NOT refer any production plan Smooth and update inventory management is required for effective results NO dependent requirements are created for materials planning using any of the
CBP procedure (NO BOM)The master data used in CBP are
a. PPC Planning calendarb. Quota Arrangement Type – Allocation / Splitting
In CBP, Total Planning and Single item planning are executed on Single level
ONLY ONCE INDICATOR
It is fixed in the Quota arrangementTo avoid a situation, where more than 1 order proposal is created per requirement for a source of supply, with max. Lot size, you can set only once Indicator
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PRIORITY FUNCTION
It is fixed while creation of quota arrangementIt defines the sequence of source of supply, irrespective of quota rating.Priority indicator overrides quota
While source determination, system starts with SMALLEST number in the priority filed.Once the priority sources are completed, then it will work as normal quota arrangement for non-priority sources
Material Requirement Planning (MRP)
It is especially useful for finished goods (Internal procurement) An MRP type indicator controls whether external requirements (Sales order or
manual reservations) are to be included NO past/ historical data considered
MRP Types
- It is the key which controls the MRP procedure to be used for planning run- It controls the planning parameters must/ can be entered when maintaining the MRP
data in Material Master.- MRP types are AP – External Planning PD – MRP/ ND – No Planning VV – forecast based VB – Manual re-order point RP – auto replenishment MPS – Master production scheduling/ Time based planning, etc
MRP relevant data in material master
1. Basic data – Material/ UoM/ description2. MRP data – MRP type/ delivery time/ lot size indicator/ MRP controller/
Scheduling margin key3. Purchasing data – Purchase group/ GR processing time4. Accounting data – Valuation class/ Valuation procedure/ valuation price5. Plant storage data – MRP indicator for storage location / special procurement type
storage location6. Forecast data – Consumption data
MRP Controller – Person or Depts. Responsible for materials planning
- Procurement type – Internal/ external/ both
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- MRP type – How the material is planned- Lot size – Calculate the quantity to be produced/ procured
MRP Profile – A key in which we can store MRP parameters that do not depend on the material master record or defaulting the frequently used MRP data to avoid data entry.
PLANNING RUN
MRP run types1. Planning run for 1 Plant – On line (Total Planning)2. Planning run for 1 Plant – Background (Total planning)3. Planning run for 1 material – On line (Single item planning)
- Planning run can be for single plant or several plants - Planning run can be for Single material (Single level) or BOM level (multi-
level)
Planning sequenceLow level code- Low level code – The lowest level at which the material appears in a BOM- A Material low level code is always greater than the low level code of all its
predecessors in all BOM- Low level code controls the sequence of planning run (0,1,2..)- We can DISPLAY the low level code in the material master from MRP1(Any view)
view by choosing the icon “Info on material”Extent of planning run
Planning types1. Planning all materials in a plant
Processing key for planning run – Planning of planning file – NEUPLThis case is used when we are running the planning run FIRST time
2. Material which undergoes changes (relevant to planning run)Processing key for planning run – Net change planning – NETCH
Or Net change planning in Planning HorizonThis is the case for subsequent runs (after NEUPL/ NETPL)
- Planning horizon is set in customizing- The planning horizon should at least span the time period in which sales orders are
received and contain delivery and total lead time of the material.- Once the planning run is completed, the respective entry in Planning file resets
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Planning File It controls the planning run and scope
- Contains all materials relevant to MRP for each plant for the planning run- Planning file entries includes the information like
1. Low level coding2. NETCH or NEUPL3. Whether the BOM is re-exploded or deleted
- Respective entries in planning file are made automatically by the business application of the system
- When material master is created with MRP data, and a valid MRP type, the material is then automatically included in the Planning file
- System checks for the following in Planning file1. The scope of Planning – NETCH/ NETPL2. Calculate the low level codes3. BOM re-explosion requirement4. Planning mode – Deletion of existing proposals (Not firmed proposals)5. MRP date6. Is the material is a Master Scheduled Item
We CANNOT display individual customer planning file entries Setting up Planning file is carried out in background We can create an planning file entry manually also.
Net change planning ONLY plans that material that have been subject to a change, relevant to MRP lead to a planning file entry being created specific to the Plant & Material
Carry out planning run on regular intervals and check the requirement in planning horizon
Creation Indicator controls the creation of PR/ PO/ Scheduled lines and MRP Lists
CONTROL PARAMETRS OF MRP
MRP run forMaterialMRP areaPlant
Parameters are1. Processing key – NETCH(N) or
- NETPL (P) or- NEUPL (G)
2. Creation Indicator for PR – 1. Purchase Requisition2. PR in opening period3. Planned Orders
3. Delivery Schedules -1. No Scheduled lines
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2. Scheduled line in opening period3. Schedule line
4. Create MRP List -1. MRP List2. Depending on exemption message3. No MRP List
6. Scheduling -1. Basic dates will be determined for Planned Orders2. Lead time scheduling and capacity planning
7. Planning Date -
We can simulate / display the planning run before actual planning by selecting the check box
MRP area
MRP area can be Plant or Sloc or Sub contractor stock A storage location/ subcontracting stock area should be assigned for one Plant for
carrying out MRP Material requirement planning with MRP areas CANNOT be REVERSED A subcontractor should be assigned to only one MRP area for carrying out MRP MRP areas of Sloc and Subcontractor area are only suitable for STOCK In customizing we have to assign additional (than Plant) MRP areas like Sloc and
subcontractor area. MRP areas can be entered in Material Master
If we are not specifying the MRP area, system will take PLANT as MRP area as default.
Preparation of MRP run with MRP areas (in CUSTOMIZING)
a. Convert Planning file entries for MRP areasb. Activate MRP – MRP for MRP areasc. Create MRP areas – Number (5 digit), Type & receiving storage location
Assign storage location or subcontractors to the MRP areas Type –01 for Plant, Type –02 for Storage Location, Type –03 for Subcontractor
d. Assign MRP areas to Material (in Material Master)e. Check storage location. The same storage location for the MRP area is assigned in
Material master or not.We can assign a material to ONE or MORE MRP areas by creating a segment for each MRP area.
PROCESS FLOW during PLANNING RUN
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1. System CHECKS PLANNING FILE ENTRIES – Is the material is relevant to MRP or not
2. System carries out NET REQUIREMENT CALCULATION –Whether the requirement is covered by available stock or not. If NOT, system generates procurement proposal.
Net requirement check at PLANT level, after the planning file check. This is applicable for Re-order point planning and MRPThe system process it like
a. Check the Plant Stockb. Consider GRs and GIs (Reservations also)c. Calculate the quantity to be procured
Safety stock is IGNORED, while calculating the shortage quantity
3. System CARRIES OUT LOT SIZE CALCULATION – As per the lot size procedure set in Material Master.
1. System compares the shortage quantity and lot size2. Calculates the procurement quantity
4. System CARRIES OUT SCHEDULING – Calculates the start and finish time of procurement proposal
For scheduling, the pre-requisites are – Processing time, planned delivery time and GR processing time.In FORECAST BASED Planning – BACKWARD SchedulingIn RE ORDER POINT PLANNING – FORWARD Scheduling
5. System DETERMINES THE TYPE OF PROCUREMENT PROPOSAL – PR/ PO/ Schedule lines as per the settings made and Quota is also checked
In Procurement proposal creation the system1. Creates planned orders for in-house production2. Creates PR for external procurement
It depends on the procurement type/ Quota/ Source List/ Shipping Notifications
6. System Re-ORGANIZE THE CRITICAL SITUATION - Generates Exemption messages and carries out re-scheduling check
Exemption messages are for Individual MRP element. Maximum of 2 exemption messages per MRP element is possible.Stock transfer option also can be utilized as per the Creation Indicator setting
7. System CALCULATES THE ACTUAL DAY’s SUPPLY AND THE RECEIPT DAY’s supply
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If we do not save any MRP list, the procurement proposals generated by the system are stored in database. Then we can process it through Stock/ requirement list, instead of MRP list
Evaluations of Planning run results in CBP are – MRP List & S/R List. MRP List can be a S/R list at the time of last planning run MRP Lists are stored in the system till it deleted manually OR replaced by a new
list of next planning run S/R List is not saved in a fixed state in the system (but subject to change). It is
available in WORKING MEMORY ONLY We CANNOT set a processing indicator for a S/R List
Stock- Requirement List (Transaction code – MD04)
Header variables – Material info, Consumption valuesMRP Elements – Date, exemption message, Receipt/ requirement quantity, Available quantityContents – Planned orders, PRs, Production orders, POs, Plant stock, Storage location stock, Forecast requirements, Sales orders, reservations, etc’X’ marked PR in S/R list is confirmed ones, created against manually (Firmed tick in PR), not created by MRP run
Stock-Requirement list is a DYNAMIC List
MRP List (MD05)
List generated by planning runIt describes the status of a material at the time of planning runIt looks similar to S/R List
MRP List is a STATIC List
Customizing for MRP
Levels are – Material Master- MRP area/ group Hierarchy
- Plant parameters
MRP Group – is an organizational object with which we can assign special planning control parameters to a group of material
MRP area
Area where the MRP run is planned.We can assign different MRP parameters to a material for each MRP area.We can select subcontractor area also as MRP area
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Requirements is a MUST to run MRP (like reservation)
MRP results are monitored with the help of exemption messages.System can display maximum 2 exemption messages per MRP element
LOT SIZING PROCEDURE
Types a. Static – Lot for lot/ fixed lot size/ Replenishment up to max. stock level, etcb. Periodic – Daily/ weekly/ monthly. Flexible period according to Planning calendarc. Optimum – Part period/ Least unit cost/ Groff recorder procedure/ Dynamic lot size, etc
Lot size is set in Material Master. Additional restrictions like minimum lot size, maximum lot size, rounding profile, etc can also be fixed.
a. Static – System DOES NOT take future shortages in to account- Lot for Lot – Exact shortages qty as Order qty- Fixed lot – Fixed qty as lot size and order qty- Replenishment up to max. Stock – Qty required reaching max. stock in Material
master as Order qtyb. Periodic – Qty required in that time interval as the lot for order qtyc. Optimum – System will take care of following points to arrive in optimum lot size
- Many deliveries or Higher Order cost- Minimum stock keeping or Minimum storage cost- Few deliveries or Low order cost- More stock or High storage cost
For this we have to enter the ordering costs in Material master. System determines the storage cost using the storage cost indicator in material master Storage cost interest rate is in Customizing Storage cost = Requirement x Price x Storage cost Indicator rate x time in storage x 1/100
x 1/365 We can influence the grouping of requirements to form a lot by entering additional restrictions in material master record like min. and max. Stock level
RE-ORDER POINT PLANNING & EVALUATION
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If requirement of a material is planned automatically and MRP is active in the Plant, the system automatically carries out planning file entries upon transactions relevant to MRP. We can plan manually also.
MRP can create PR directly or MRP to Planned orders and then to PR
Creation Indicator – set in entry screen of planning run- It controls the creation of planned orders/ PRs/ Scheduled lines in MRP List- It also controls whether the system should always create an MRP list for all planned
lines or only to certain items depending on exemption message.- In total planning the creation indicator in the entry screen is used for planning, if no
other Plant or MRP group parameters have been maintained for the material.
Procurement Proposal or Order Proposal
- This is created becoz of MRP run- When the system creates an order proposal, it check to see whether the receipt is to
be made via in house production or external procurement. This is defined per material per procurement type.
- Procurement type is preset by the material type in Customizing- Net requirement calculations is carried out by the system for a specific plant during
planning run as a part of MRP- In Scheduling system calculates the start and finish dates of the procurement
elements for procurement
Material – Material type to Procurement type- In house production > Planned order > Production order
OR - External Procurement > Planned Order > PR > PO
Material & Plant – Special procurements- Standard Procurement- Stock Transfer- Subcontracting- Consignment
The system checks whether the forecast requirements can be covered by the available stock and planned receiptsIf the material shortage occurs, system calculates the shortage qty and creates the order proposal
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Re-Order Point Planning
Max. Stock level Stock
Re-Order Level
Safety Stock
Re-order point Delivery Time Time
Replenishing lead time
- Re-order point planning procedure is based on a comparison between the Stocks and re-order point.
- Safety stock, prior consumption, future requirements and replenishment lead time are to be considered while defining re-order point
- Present stock, Firm planned orders, Firm PRs, POs are also define the net requirement
Calculation of Dead lines
Creation of PR PO Date Delivery date Stock available at SLoc
Purchasing processing Planned delivery GR processing TimeTime Time Time
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11 INVENTORY MANAGEMENT
MOVEMENT TYPE
- A 3 digit key used to differentiate between goods movements in R/3 system.- It is having several control functions in Inventory Management
1. Plays a central role in automatic account determination2. Determine which stock or consumption accounts are to be updated in FI.3. Determines the format of the screen where we enter documents and how the
quantity fields are updated.
100 series – Good receipts types200 series – Goods Issue types300 series – Stock transfer types400 series – Transfer types500 series – GR + GI + Others600 series – GI + TF + TR + 700 series – Physical Inventory800 series – GR with Tax + RTP
900 series - Warehouse
Valuated Good Receipts
Auto creation of storage location- If it is set in customizing for Plant & Movement type, the storage data is created automatically during the first goods movement.Auto creation of storage location happens if the given quantity is to be posted in to normal storage location.Auto storage location will NOT be created for goods movements in SPECIAL STOCKS
Stock types
1. Unrestricted – Available for MRP & Available for withdrawal2. Quality Inspection – Available for MRP but NOT available for withdrawals3. Blocked – NOT available for MRP & Withdrawal4. Restricted stock. -As per the batch requirement in Batch Master
Stock Indicators are the indicators for differentiate between stock types on goods receipt
Negative stocks are allowed for special stocks if you have activated negative stock in the Valuation area and for the special stock concerned in that Plant and storage location
Negative stock can be fixed in the material master for a material( In Plant/ storage view1)
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If it is activated in customizing for a stock type and Plant, then there is no need of activating negative stock for each and every material in the material master.
Negative stocks allowed on following special stocks –Vendor consignment (K), Stock of material from Vendor (O), Consignment stock at Customer (W), Sakes Order stock (E), Project Stock (Q), Packaging at Customer (V), RTP of Vendor ®
We can manage Negative stock for materials with MAP and special stocks Ensure that you DONOT have negative stocks on the BALANCE SHEET KEY
DATE. Blocked stock also can be negative Settings of negative stock possible for
1. Valuation area2. Plant & special stock types3. Storage location4. Material master level
STOCKS
During goods receipt, a material and accounting documents are generated and it updates the Purchase order history
After GR is posted against a particular movement type, the Quantity, Material, Movement type and Organizational level CAN NOT BE CHNAGED. If any errors, reverse or cancel the document
We can post withdrawals & Consumption ONLY from UNRESTRICTED Stock. If we want to withdraw material from QI/ blocked, we have to first transfer post it to
Unrestricted and then withdraw it. Plant stock & Storage location stocks views will appear automatically in material
master after booking material movements.
Stock Transfer Vs Transfer Posting
Stock Transfer involves physical movement of goods but transfer posting need not be In transfer posting ONLY Material document is generated (NO Accounting
document) Movement type is the key control factor in both the cases.
Quality Inspection 322
350 349 321
Blocked 343 UN Restricted
344
Document principle applies to Inventory management.
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A document is the proof of that transaction involving stock changes has taken place. Documents are stored in the system
Material Document Vs Accounting Document
A material document consists of Header (Posting date, created by, etc..) and item level details like quantity, material, storage location, etc
Accounting document consists of Header (General data like posting date, posting period, currency, etc.) and item level details like G/L account number, amount, etc.
Material document and accounting documents are INDEPENDENT documents We can identify the material document by the material document number and
document year. The Accounting documents are identified by the accounting document number, company code and a Fiscal year.
In Accounting document, the number ranges are assigned to a Document type. But for material document, the number ranges are assigned to a TRANSACTION / EVENT TYPE
Goods Movement Transaction/Even type Document typeGR for PO WE WE or WNGR for others WF WEGI/ TP/ Others WA WAGI for deliveries WL WL
We cannot change a document once it is posted. Some additional information like texts can be added. So we use reversal for correction
EFFECTS OF A GOODS RECEIPT
1. Stock Value updated in the Material Master2. Material and Accounting documents are generated3. Creation of an Inspection lot, if the material is Quality activated4. Stock and consumption accounts are updated5. Transfer request is created, if Warehouse Management is activated6. Purchase Order and PO History is updated. RFQ, PR also updated
Stock Overview
For each organizational level, Client/ Co code/ Plant/ Storage location / Batch/ Special stocks
It’s a STATIC display of stocks. Planned data are not available
VALUATION CLASSIt is the grouping of materials to determine which stock accounts are to be updated upon goods movements
For automatic account determination, R/3 system works with Valuation Class. It is fixed at Accounting view of material master
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Material Valuation is depends on Price Control (Standard or MAP) and goods movements (GR/GI/TP)
GR/ IR clearing account depends on the PO price Changing of the price control from standard to MAP is always possible.
Delivery costs – Planned and unplannedUnplanned delivery costs are directly booked through MIRO, so the valuation done at GR is NOT Correct if the transaction is having an unplanned delivery cost
Goods receipt can be for with reference to 1. Purchase Order2. Order3. Others
The stock display will be as followsGR from Stock detail as per systemPurchase Order Open PO quantityOrder Open order quantityReservation Planned receipts
ENJOY Transaction – MIGO
MIGO transaction is combining following 7 transactions in single code1. MB01 - GR for known PO2. MB0A – GR for Unknown PO3. MBRL – Return Delivery4. MBSF – Release of blocked stock5. MBNL – Subsequent delivery6. MBST – Cancel Material document for GR7. MB02/ 03– Change & Display Material document
GR of Blocked Stock (Movement type –103)
It is the conditional acceptance of goods. While we post the material into GR blocked stock-
1. Quantity is posted to Stock2. Material is NOT VALUATED3. The transaction will be available in PO History4. The material is NOT available for MRP
GR STOCK Unrestricted use (101)Quality Inspection (101+X)Valuated Blocked (101+S)
GR Blocked stock (103)
When GR blocked stock is released (MBSF), then it is valuated automatically. It will have the same effects of an ordinary GR.
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While accepting the GR blocked stock to Plant unrestricted stock(105), you can refer the material document of earlier GR or Purchase Order
Goods Receipt in to QI stock (101 +X)
Pre-requisites1. Quality inspection indicator in material master2. QI indicator in Additional data in PO (Header). It will automatically copied from
material master3. Set QI indicator in GR at item level
Possible movements for QI stocks
1. Transfer to Unrestricted stock and its reversal2. Transfer to GR blocked stock & its reversal3. Transfer to Blocked stock and its reversal4. Transfer to Sampling and its reversal5. Return delivery to Vendor and its re-receipt
OTHER GOODS RECEIPTS
1. Initial entry of stock balances – Movement type – 561/ 563/ 5652. External Good receipts without PO (Movement type –501)3. Internal Goods receipts without production order (Movement type –521)4. Good receipts for By-products (Movement type – 544/542)5. Good receipt for Free of Charge (FOC)- Movement type -5116. Returns from customers (Movement type – 451)
DELIVERY COMPLETED INDICATOR
The delivery completed indicators are fixed in PO & GR. After setting the delivery completed indicator at GR, the open order quantity
becomes ZERO. But still we can post new GRs against it. But the open order quantity WILL NOT CHANGE.
If we change the quantity of a delivery after posting the GR, the system DOES NOT CANCEL the delivery completed indicator automatically. But it issues a warning message.
If an order quantity/ return delivery quantity reduces the delivered quantity below the tolerance limit, the system cancels the delivery completed indicator. But issues a message “ Delivery completed indicator has been reset”. Thereafter we have to manage it manually.
Standard R/3 system does not accept Over deliveries
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For accept over deliveries, you have to select unlimited delivery in PO or properly set the over delivery tolerance
GRs valuated on the basis of the incoming quantities in the Order price unitInvoice verification is also based on the GR qty in the order price unit.
If you want to restrict a GR upto a certain date, enter that date in Latest GR date in “Delivery” tab of item
RETURN DELIVERY
Return delivery can be created with reference to a material document or Purchase Order
Receipt by Return SubstituteDelivery by Delivery
101 122 123103 124 125105 122 123
If you receive a substitute delivery, after you have returned the goods to a Vendor, it is ADVISABLE to reference the associated return delivery by using a reverse posting when you post a new receipt
122- Return delivery from WarehouseIt results into 1. Material document created
2. Stock accounts updated 3. Purchase Order update
124 – Return delivery from GR Blocked stockIt results ONLY in creation of a material document as a proof of return
Return delivery in GR based Invoice verificationUses the material document to reverseIf invoices are settled and then you are returning, please ensure that
Invoices should be cancelled
In customizing, for each MOVEMENT TYPE, you can specify Reversal and return delivery movement type and transactions in case of GR based IV
Difference between Reversal & Return delivery
Reason for movement is optional in the case of reversal, but mandatory in return delivery.
Return delivery slip is not required for reversal but mandatory for return delivery. Both operates on different movement types.
Movement type –161
It is used to assign in a PO so that while posting the GR, the qty in the GR will be automatically removed from the stock. It is generally used for exchange of materials.
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Quantity Distribution facility at GR
We can distribute the incoming quantity in GR to1. To several storage locations2. To several Movement types3. To several stock types4. To several Batches
Note – Batch selection list DOES NOT work with SPECIAL STOCKS
Goods Receipt using Order Price Unit
If the Purchase order contains an Order price unit that differs from the order unit, enter both units at Goods receipt because,
1. Goods receipt is valuated on the basis of the goods receipt quantity in the Order price unit
2. Invoice verification is on the basis of the GR quantity in the order price unit So the system immediately detects the variance, if anyOrder price quantity tolerances are fixed in customizing for error/ warning messages
Entering a Freight Vendor at Goods Receipt
Pre-requisites1. You can enter a freight vendor, if the condition type for delivery costs allows you to
do so. It is customizing setting for a condition type. The Vendor at GR is to be selected for that condition type in customizing. You can attach a vendor for freight while creating the PO by attaching a proper condition type in the pricing procedure and attach in PO itself.
2. The condition type should be included in the pricing procedure (Should be available in Conditions tab of item in PO)
Goods Receipt of Non-valuated goodsThe receipt of goods to unrestricted stock. We can directly issue it for consumption
Automatic PO generation at GR
We can configure the system in such a way that system creates PO in background during the receipt of Goods which is not having any PO. We can do the invoice verification afterwards.
In Customizing for organizational structure, the plant must be assigned a purchasing organization in the step Standard purchasing organization - assign plant so that the system can determine the purchasing info records.
Automatic POs are allowed only for movement type 101 & 161 in standard system. The customization for these movement types are to be there for automatic PO creation
System valuates the GR with the price defined in purchasing info record. MIGO transaction is supporting automatic PO. It is available in MB01 In Vendor Master the purchase group default data for material to be maintained Automatic PO is only possible for valuated goods Pre-requisites for automatic PO are;
1. Selection in Material Master2. Selection in Vendor master3. Info record should be available4. Valuated good receipt5. Automatic PO selection for Plant & Movement types (101& 161)
If a PO is generated in the background for the return item (movement type –161). This PO is required if you want to carry out invoice verification for the credit memos, issued by the Vendor for this return
SHELF LIFE EXPIRATION DATE (SLED) check at GR
Pre-requisites for SLED checking are:1. Minimum remaining shelf life has to be maintained in Material master or PO2. Minimum remaining shelf life value is in number of days that a material has to be
useful in order that system will accept GR3. SLED check should be active in Plant (Customizing)4. SLED check should be active for the movement type (Customizing)
If SLED is active, we have to enter the expiration date or production date during GR
At the time of GR, system checks the SLED and issues warning messages as per the setting
After GR is posted, the SLED data will be stored in material document Latest acceptable GR date can be entered in PO, so that system can check
the date during GR Early good receipts – System can issue warning message on early GRs
depending on customizing. And can post GR to GR blocked stock, if required. If NO Unit of measure indicated in material master, the system uses the
UoM1. Order unit for goods receipt with respect to PO2. Production unit fro GR for Order3. Units of issue for other movements and reservations
Dynamic availability Check
depends on1. Movement type2. Transaction code Availability check prevents the book inventory balance of various physical stocks
from becoming NEGATIVE
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Availability checking can be done at Plant/ Storage Location / Special stock level for the month or even previous month
Checking by movement type System checks for the MOVABLE QUANTITY In goods issue screen select an item, go to More functions > Movable quantity
Activation in Customizing for Plant & Movement types are required for
1. Automatic storage location creation2. Automatic PO at GR3. SELD checking
Missing Parts Check
Make it active in Plant in Customizing (inventory management) By missing parts check system will issue a message to MRP controller (background
processing)
Multiple account assigned GRs
Goods receipt are NOT VALUATED for MULTIPLE ACCOUNT ASSIGNMENTS (If the multiple account assignment for a SINGLE item). For this GRs can be made but accounting documents WILL NOT be generated
In Invoice verification of this, accountings will be generated by Vendor- credited and cost center –debited
For multiple account assignment, there WILL NOT have FI documents at GR level.
GR Forecast
Number of anticipated deliveries for Planning purpose.Inbound deliveries against notifications are NOT taken in to consideration because this would have a detrimental influence on system performances
RESRVATION
Request to warehouse to have materials ready for issue at a later date for a special purpose.It ensures the availability of material when it needed. It also can be used to plan inward goods movements.
We can create a reservation ONLY for ONE purpose. Ie. ONE MOVEMENT TYPE or ONE ACCOUNT ASSIGNMENT OBJECT
Reservation can be at Plant/ storage location/ Batch LEVEL
We can create a reservation
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1. Manual2. Auto
a) For Orders/ Networks/ WBS elementb) For stock transfer reservation
We CAN NOT change a reservation made by auto for that you have to change the Order/ Network/ WBS element
Effects of reservation1. It creates a reservation document2. reserved stock increase3. In MRP, available stock reduces. (In S/R List)
Structure of Reservation ScreenHeader data
Account assignment Basic Date Check calendar
Item Details Material Plant / Storage location / Batch Requirement Date Movements allowed or not
Reservation can be created WITH or WITHOUT a reference.
Important points while creating/ changing a reservation1. Allow movement2. Set deletion Indicator3. Change base date
While changing reservation following are NOT POSSIBLE1. Account assignment data2. Material Number3. PlantIf you want to change these, create a new reservation
Reservation Management Program (RMP)
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30 days Allow movements (10Days)Delete reservation
Requirement of reservation Baseline date
The management program for reservations can both re-organize the reservation file and make mass changes to reservations
The management program ONLY includes reservations that have been manually created.
Calculation of deletion date of OLD or completed reservations- Predefined No of days. SAP recommends 30 DAYS from baseline date
Calculating movement allowed period –Baseline date + Predefined days – SAP recommends 10 Days
Customizing settings for Reservations Number range with interval Default values for movement allowed indicator Copy rules Dynamic availability check Filed selection Create storage location automatically
Reservation can be done for a planned item for1. Consumption (reservation for available/ stock item)2. Receipts (reservation on incoming item)3. Transfer posting
And reversal of these above transactions
Issue against reservation with planned item (Cost Centre) reduces the Warehouse stock
Issue against reservation WITHOUT planned item (GI) are done by taking them to unrestricted stock and then issue.
In case of reservation in Transfer posting, the sending plant will reserve the item and receiving plant will reserve the material in “Receipt reservation”. After entering the transfer posting, the account will be cleared.
MB21/ 22/ 23 – Create/ change/ display reservation MB 25 – Reservation List Reservations that have been deleted/ reversed CAN NOT be DEACTIVATED
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INITIAL STOCK ENTRY
1. If the material has a standard price, the valuation of initially entered will be based on this standard price. If you have entered a different price, other than the standard price in material master, the difference will be posted to a Price difference account.
2. If the material has a moving average price, the initial inventory data is valuated as1. If you entered a value for the initial inventory data, this value used to used
to valuate the quantity to be transferred. If the quotient of initial inventory value and initial inventory quantity differs from MAP, the MAP will be changed through the initial entry of inventory data
2. If you have NOT entered a value for the initial entry of inventory data, the quantity to be transferred is valuated according to the MAP and IT DOES NOT CHANGE
The movement type used for initial stock entry is 561/ 563/ 565 (UR/ QI/ Blocked) and the valuation of inventory data transferred will depend on 1) Price control & Price in material master 2) The value and quantity of material transferred.
The procedure for Initial stock entry should be:1. Upload the material master with ZERO Price (MM01)2. Upload the Intial Stock Entry thru MB1C transaction. (It will NOT have
any accounting document because the price is Zero)3. Upload the Material Quantity and Value through MR22 (Debit or Credit a
Material)This is because:If we are maintaining material master with price and uploading quantity with MB1C, the system will calculate the stock value as per the Materail Master price which is LIMITED to TWO DIGITS:
Example :Material Master Price – 10.236, system will accept either 10.23 or 10.24The legecy Value of the material is 10236Quantity-1000System will calculate the value as –1000x10.23=10230 or 10240 (difference of –6 or +4)
If you do Materail Master price = 0Quantity =1000If we are uploading Qty 1000 and Value 10236, system will upload Value as 10236 eventhough the Material Master price will be updated as 10.23 or 24 after the uplaod, But the value loaded will be exactly as per the Legecy system
NOTE : The price of material should be the price of Stock keeping unit
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GOODS ISSUE
TOFROMWare House To Cost CenterConsignment GOODS ISSUE To AssetPipe Line To Sales
To OrderTo SamplingTo scrapping
Sampling Materials are treated as scrapped. But the value of sampling material posted from the material stock account to the Quality Inspection stock account.
But while scrapping material, the material will be posted to Scrap account and it debits to the cost center.
Issue to sampling and scrapping are different. We can change the movement type while goods issue. Goods can be issued to reservation and BOM While goods issue, we can have collective entry with different account assignment
also. System WILL NOT update the consumption statistics in Material Master, if you
post goods movements using special stock types – Sales Order Stock and Project Stock
We can set final issue indicator while issuing against a reservation Stock determination is a function that can be used on a cross-application basis. We CAN issue goods from Quality inspection and Blocked stock ONLY for
SCRAPPING or SAMPLING Reversing a planned goods issue
Can be reversed with reference to a Material Document OR to a reservationA Material document (Reversal) will be createdAn accounting document will be createdStock will be updated (increased)Consumption will be reduced
While issuing a material for scrapping,- Relevant stock reduced- Value posted from stock account to scrap account- Price is taken from material master
o Movement type Consumption for201 Cost center
221 Project231 Sales Order241 Assets251 Sales
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GOODS ISSUE
261 Production order281 Network291 All account assignments
BACK FLUSH
It’s a type of goods issueThis type of withdrawal means that the components are already available at the production sites (can be a production storage location). They are physically consumed during production processes. However the quantity consumed is NOT reported until it is known how much has been actually consumed, that is not available till production order confirmation. For these components you need NOT to enter a goods movement in Inventory management system. While confirming the production order, system automatically creates a goods issue and remove from the stockSetting at material master.Example – Charging of reactor with various materials
GR/ GI SLIP numbering
We can have GR/GI slip number in addition to the Material and accounting document numbers
It is a statutory requirement for some countries like Italy It can be assigned Internally/ externally by each Plant or Storage Location or
Movement type Options – 1) Include the filed for the GR/GI slip number in the SAP script form 2) Call up form –MB-XAB using transaction MBXA
Then customize it “Print report” SAPLMBXA in print control Serial numbers should be active for the Plant In stock transfer (Plant to Plant) of material with serial number is only possible if
the same profile is assigned to the material in both the Plants
Goods Movement via Shipping
Pre-requisites Plant data, Sales Organization, Distribution channel, shipping point and division Sales & Distribution data should available in material master The customer field in Vendor master as the vendor for shipping ia also the customer
Movements Goods issue for a delivery Stock transfer using STO Returns from customer Return deliveries to Vendor Returns to STO
Scheduling Material availability date
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Transportation planning date Loading date Goods Issue dateAll depends on the Factory calendar
MATERIAL BLOCK (ENQUEUE) for Goods Movements
To PREVENT more than 1 goods movement being posted at a time for the same material and there by preventing inconsistencies between the stock quantity and Value
It is set at CLIENT LEVEL There are 2 types :
1. Exclusive Material Block Plant data and accounting data will be locked SIMULTANEOUSLY up to the end of the goods movement posting. The disadvantage of this is Long locking period
2. Late Material Block a) The materials are no longer blocked exclusively, but ONLY at the
TIME of actual data SAVEDb) The material is blocked exclusively at the latest time possible
The advantage is several users can work simultaneously The disadvantage is System will read material master record several times and in case of outward movements, lock entries of other users in ATP server. It will leads to reduction in performance.
It is available in Customizing – Material Management > General settings > Material Block
In our system it is selected for – Lock exclusively – Waiting system – 10 seconds
STOCK DETERMINATION
Enter stock determination group in material master at PLANT level Stock determination Rule is assigned by the application in which it is called
(transaction) Stock determination group and rule forms a unique key for the stock determination
strategy Stock determination strategy defines which stock can be considered for a
transaction. (Special stock indicator/ storage location) and preferences are to be included (in sorting option)
As per the SD strategy you predefine, the system makes decisions on material withdrawal depending on the material, Plant and business process.
Stock determination can be used for UR stock/ Vendor consignment/ Pipeline stock/ Sales order stock/ Project stock
Scenarios 1. The back flushing of material in repetitive manufacturing or a production
order should be carried out for a company’s own stock first and then vendor consignment stock (Most reasonable vendor first)
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2. Material from preferred vendor first. If more vendors, use split valuation for price and quantity.
3. First issue from central buffer stock and then from storage location for staging material
4. If stock is not sufficient, go to pipelinePre-requisite settings for Stock Determination
1. Define a cross-application strategy for stock determination according to which stock should be reduced in Inventory management. It is at PLANT level based on stock determination group and stock determination Rule
2. Assign SD group to material in Material Master record (Plant/Storage location 2 view)
3. Assign SD rule to the business transaction/ event (Movement type)
SD Types1. Auto in back ground2. Online during SD process
SD Strategy- It depends on1. Plant2. SD group3. SD rule
Define SD Strategy1. which stocks can be used for the transaction/ event type (UR/K/P/E/Q)2. From which stocks are to be withdrawn3. Processing method (Background/ online)4. Priorities (Batches, etc)5. Valuation type/ Split valuation
How to use SD1. While transaction (GI/ TP), put a “*” in storage location field2. Choose to continue – If SD is activated, the system displays a dialog box indicating
the stocks it has been determined for this withdrawal as per your customizing settings
3. Select/ change the proposal as required4. Post the document
NOTE – MIGO is NOT supporting Stock Determination functionality
Returns to Vendor
Movement type Functionality102 Reversal of GR due to any clerical mistake122 Returns to Vendor – due to any reason like damage124 Returns to Vendor – from GR blocked stock161 Returns to vendor – For the exchange of another material
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STOCK MOVEMENTS-TRANSFERS
Stock Transfer Vs Transfer Posting
Stock Transfer involves physical movement of goods but transfer posting need not be In transfer posting ONLY Material document is generated (NO Accounting
document) Movement type is the key control factor in both the cases. Stock transfer can be WITH or WITHOUT Purchase Order (With & Without SD and
between Company codes also) Transfer posting can be between locations, stock types and even material to material
Levels of stock Transfer1. Storage location to storage location2. Plant to Plant3. Material to material4. Company code to company code
1. Storage location to storage location It can be one step or 2 step If it is 1 step, the movement type is 311 and if it is 2 step the movement types are
313 & 315 It is used for transferring the stock within 1 Plant, the transfer is NOT
VALUATED and there will not be any accounting document2. Plant to Plant
It also can be in 1 step or 2 step procedure. a) 1 Step
1 step is being used where the Plants are located nearby and there will not be much time to transfer the stock. In other wards the stocks can be seen in the system immediately (no stock-in-transit)
The movement type is 301. Goods issue from sending Plant and Good receipt on receiving Plants will happen
simultaneously. Both the stocks will be in Un-restricted use.b) 2 Step
When the Plants are distant and there will be a time gap for transferring the stock. Stock-in Transit data is available in the system
The movement types are 303 & 305. Goods Issue in sending Plant Goods receipt at receiving plants are to be carried out Can monitor the stocks in stock-in-transit
3. Material to Material It is possible ONLY if both the materials are managed in SAME UNIT OF
MEASURE.
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This functionality is used for transferring the material when its characteristics changes in due course of time and it resembles with an existing material.
It is mostly used in Pharma & Chemicals
STOCK TRANFERS
We can move the stock between Plants in following scenarios :1. 1 Step2. 2 Step3. Through a stock transport order (2 step)4. Stock transfer with Delivery5. Stock Transfer with delivery & billing
1 & 2. 1step and 2 step transfers Movement type 301 for 1 step and 303 & 305 for 2 step. Material price for TRANSACTION will be calculated at SENDING PLANT’s
PRICE ACCOUNTING document is generated at 1st step itself, in 2 step procedure
and there WILL NOT be any accounting document in 2nd step Material is booked in receiving plant as “STOCK in TRANSFER” if we check the
stock overview after 1st step.Note: If any damage occurred for a material while it is in stock-in-transit :2 ways to treat it
1. Reverse the goods issue from the sending plant and post the goods to scrapping2. Make a goods receipt in receiving plant and then issue it to scrapping
3. STOCK TRANSPORT ORDER Stock transport order document type – UB and item category-U in STO Movement types are 351 & 101 After creating PO, the material quantity in stock overview will show as “Open
Order quantity” in receiving Plant and there will not be any change for the stock in sending plant.
After posting stock transfer, 1. Material Price will be as per the sending plant’s price2. Quantity will reduce from sending Plant3. Quantity will NOT be increased in receiving plant. But it will shown as
stock-in-transit4. Accounting document will be generated along with this transaction
After receiving goods at receiving plant i. NO accounting document will be generated
ii. Stock in receiving plant WILL increase While transferring the stock, the price of the sending plant will be taken into
consideration for calculating the stock value. But the material price will be re-calculated by the system at both the plants as per
the price control set in material master. The documents are created as per the price control
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NOTE : To carryout stock transfer from Plant to Plant for a material that is subject to SPLIT VALUATION, you HAVE TO USE 1STEP or STO
SPECIAL STOCKS
Special stocks that are managed separately becoz they are not belonging to your company.
The special stocks and special procurement types are of 2 types1. Company owned special stocks2. Externally owned special stocks.
1. Company owned special stocks The special stocks that are owned by the Company stored with Vendor or customer.
1. Stock material provided to Vendor/ subcontractor2. Consignment stock at Customer3. Returnable packaging at Customer
These Materials are managed at PLANT LEVEL. NOT at Storage location level. Only 2 types of stocks are possible. Unrestricted / Quality Inspection
2. Externally owned special stocksStocks owned by Vendor/ Customer and stocked at your place.
1. Vendor Consignment2. RTP (returnable Transport Packaging3. Sales Order Stock4. Project Stock
These materials are managed at STORAGE LOCATION LEVELAll the 3 stock types, UR/ Blocked/ QI are allowed
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12 SPECIAL PROCUREMENT TYPES1. Consignment (K)2. Sub Contracting (L)3. Stock Transfer using Stock Transport Order (U)4. Third Party Processing (S)5. RTP (R)6. Pipeline Handling (P)
CONSIGNMENT PROCESS
When buying goods as a Consignment, the ordered goods still belonging to Vendor, even after delivery. The goods become your property ONLY after they are consumed. The quantity consumed are periodically settled.
The Ownership of the material is with Vendor but storing at client’s premises The stocks are NOT VALUATED, but available for MRP The ownership of the material transfers to the client ONLY after issuing/
transferring it from the consignment stock Consignment liabilities are settled periodically (thru MRKO) based on the
consumption statement by the vendor The prices of consignment stocks are defined in Info record and maintained
periodically We can use the conditions in Purchasing CAN maintain ANY unit of measure with proper definition of conversion factor
in material master Physical Inventory of Consignment stock is possible Consignment stocks are managed at STORAGE LOCATION level There will NOT be ANY VALUE in consignment purchase orders In PO, No Price, No conditions, No Invoice receipt requirement but GR
requirement Stock movements are possible. Consignment stocks can be displayed by Tcode – MB54 We can issue the consignment material from Consignment stock using movement
type – 201+K Item category ‘K’ is used for consignments We can post GRs for consignment WITH or WITHOUT reference of a PO. But
the consignment prices are to be maintained before GR Consignment stocks can be managed at Unrestricted/ QI/ blocked and we can do
the transfer posting between them. But we can withdraw the consignment from UNRESTRICTED ONLY Goods Issue from consignment unrestricted stock results in a liability to the
consignment vendor
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We can enter the invoice for consignment WITHOUT reference to a PO. Debits are posted to the “Liabilities from consignment stores” G/L account to which the credits were posted upon “Goods issue from consignment” G/L account
Consignment info record- The info record of consignment with different Plants (different prices at each plant) is having a SINGLE INFO RECORD number
Info record should be created BEFORE creating a PO/ GR.Process of Consignment Procurement & Settlement
1. Creation of Info record – ME11 2. Create Purchase Order – ME 21N
Standard procedure. Item category –K GR to consignment store Invoice Receipt is NOT required No Price in PO
3. Goods Receipt – MIGO – Receipt of Material to consignment store The movement type – 101+KPlease note that the GR can be with or without GR. Item will be in special stock while posting the GR
3. Transfer Posting – MB1B. Transferring the material to own stock The movement type – 411K (the step is Not Mandatory)
4. Goods Issue – MIGO Goods Issue from consignment store to movement types – 201/231/ 241/ 251/ 261
Note – We can directly issue the material from consignment stock using movement type 201+K, without transferring to company’s stock.
Process of Physical Inventory of Consignment 1. Creation of Physical Inventory document – In the create screen enter ‘K’ in special
stock field2. Enter Physical Inventory document 3. Post the differences – If you want to include QI/ blocked stock, enter a new material
number and enter the relevant stock type in the filed of “STY” and post the difference as per your settings
SUBCONTRACTING PROCESS
The vendor receives the components from which he produces the finished product mentioned in the PO. The components are listed in the PO and can also be determined by the system via BOM
You order an end product from a vendor and specify in the PO with components, you will send to vendor to manufacture the end product
Issue of components to the vendor and good receipt of finished product with consumption detail of components
Vendor invoice is posted against the purchase order A subsequent adjustment for excess/ under consumed components can be made.
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Item category ’L’ is used in the PO, and several components can be attached to the Po
We can enter the components by manual or thru BOM explosion System automatically creates reservation for the MRP relevant components The purchase order price will be the price of subcontracting services Conditions of subcontracting can be stored in Purchasing info record for
subcontracting We can link services specification with subcontracting items The components with subcontractor (after issuing it) are managed as a special stock
to the vendor. This stock is VALUATED and AVAILABLE for MRP as the components are your property. It is not allocated to a specific storage location becoz its still your property
We can monitor subcontracting stock by evaluations Goods issues are made, 1. with respect to a Subcontracting PO 2. From the list of all
the material of a subcontracting vendor We can do the process of subcontracting thru SD. Through delivery and shipping Good receipts are posted with respect to Subcontracting order item Consumption of components posted at GR and subsequent settlement is possible
with respect to PO Invoice verification is same that of standard process. The account postings at subcontracting at GR & invoice verification are;
SUBCONTRACTING SCENARIOOrder - SF MaterialComponent - Raw MaterialA. At Goods Receipt1. Stock account of SF Product - Debited @ (Order price + Valuation price of SF product)2. Cost of Goods Manufactured - Credited @ (Order price + Valuation price of SF product)3. Stock account of Raw Material - Credited @ Valuation price of Raw material4. Consumption Account - Debited @ Valuation Price of Raw Material5. GR/ IR Clearing Account - Credited @ Order Price6. External Labor Account - Debited @ Order priceB. At Invoice Receipt1) If there is NO deviation Price in Vendor invoiceInvoice Value = Order price 1. GR/ IR Clearing Account - Debited @ Order Price2. Vendor account - Credited @ Invoice Price (Order price)2) Invoice Value = Order price + deviation price from PO1. Stock account of SF Product - Debited @ deviation amount in invoice2. Cost of Goods Manufactured - Credited @ deviation amount in invoice3. GR/ IR Clearing Account - Debited @ Order Price4. External Labor Account - Debited @ deviation amount in invoice5. Vendor account - Credited @ Invoice Price (Order price + deviation amount from PO)
i. Stock account fro Finished goods -
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ii. Stock account of raw materialiii. GR/ IR clearing accountiv. Vendor accountv. Cost of goods manufactured
vi. Consumption account (for components)vii. External labor account
We can enter the material that is to be produced as a subcontract item in the scheduling agreement
By the issue of components (thru transfer posting), the stock of components WILL NOT reduce from your stock. The stock will be produced at the time of receipt of Goods receipt of finished product
CS01 is used for creating BOM/ components1. The order of the end product in PO. The components are attached to the item n PO2. In Inventory management, components are posted to the stock of material provided to
the vendor3. Vendor supplies the end product with consumption details of components and it will
posted to the system while GR’4. Any balance (+ or -) of components are done at subsequent adjustment transaction5. Vendor submit his invoice for the services rendered and invoice will be posted in MIRO
Process of Subcontracting Process1. Creation of Info Record – ME11. Service with price of service2. Creation of Purchase Order – ME21N – Creation of PO with Item category ‘L’.
Attach components to the item in PO3. Transfer Posting – MB1B – Transfer the components from your store to the
subcontractor using the movement type – 5414. Goods Receipt – MIGO – receive the end product (and components) to Stock by
using the movement type – 101 for main material and 543 for components5. Subsequent Settlement – MB04 – Subsequent adjustment of components, if any
(other than the entry happened during GR). Movement type 544 for components and 545 for by product
6. Invoice verification – MIRO – Normal process for invoice verification of vendor services
The Master record of end product and components are to be made available before the creation of PO
The components with subcontractor / Subcontractor stock is your stock. It is available for MRP and it is valuated, it is managed at PLANT LEVEL.
BLOCKED STOCKS are not allowed for subcontracting (Components). But we can transfer the stocks between these 2 (UR&QI) stocks
Purchase requisition and PO for Subcontracting Item Category ‘L’ No need of entering the date required for components, system will calculate it
automatically as per the planned delivery time fixed in the master. If you don’t want to change the quantities of components, you can fix it by selecting
the Fix check box. The check box is available at components overview (While you are attaching the components-in PO &PR)
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We can check the availability of components in PR at Environment > Availability or Edit > availability check in PO
NOTE If you change the quantity of material, the system will change the quantity of
component automatically as per the proportion fixed in the component overview, if the item is NOT FIXED
If you change the delivery date, the system only re-calculates the date of requirement, the components are NOT AUTOMATICALLY REDETERMINED in the BOM. In this case we have to do a new BOM explosion
The stock position of subcontracting stock at MBLBIt shows the current stock status, Planned issues & Planned receipts
Providing components for existing Purchase OrdersThere are 3 ways for providing it
1. From the “Subcontracting stock monitoring for Vendor List” as a Goods Issue via Inventory managementa) Choose Menu- PO > Reporting > SC stocks per vendor. (T Code – ME2O) The list of components that belong to this PO will be displayedb) Select the component you wish to provide to this Vendor and Choose Edit > Post
goods Issue. A dialog box appears, in which you can enter the data required to post the goods issue
c) Choose to continue.The system posts the Goods Issue in background and give the message and you can cross-check the material via MBLB, select the material and go to Environment > Material movements and see the material document posted against the above step (movement type selected is 541)
2. Issue the material from subcontracting stock as a delivery vis shipping (through SD) 3. From Inventory Management Menu
Create a transfer posting through Transaction code –MB1B with respect to a PO (Subcontracting PO). Here also the movement type is 541Note – Maximum of 4 Purchase orders can be selected for referring in Transfer posting
Subcontracting in Inventory Management (Facilities)1. Provision of components2. Goods receipt of final product with consumption details of components. We can
adjust the components at Goods receipt3. Subsequent adjustment of components4. Allowed transfer postings
a) Plant to Plant – 1step (301)b) Material to Material (309)c) Between Unrestricted and QI ( 321 & 322)
Provision of components Posting from Unrestricted stock – Can be with respect to a PO or Without PO The components can be delivered by another vendor
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Issue PO to a Vendor for supplying the components, the delivery address should be the address of subcontracting vendor. Enter the check box provision at PO. When you are getting the information that the Vendor is supplied the components to your Subcontracting vendor. Make a Goods receipt (STATISTICAL GOODS RECEIPT) in the system so that the stock position will be updated
The Goods receipt for a Subcontracting Order is VALUATE the material at Subcontracting Price PLUS the value of the components consumed
Subsequent adjustmentIn this transaction the consumption account is already posted is available / displayed as a second line for each itemUse + or - sign to adjust the components. The movement type is 544.Subsequent adjustment is possible ONLY for subcontracting orders (L)
Receipt of a BY PRODUCT generated during subcontracting The by products are entered in the subcontracting Purchase Order as components
with NEGATIVE quantity While receiving the good at GR, system automatically posts the receipt of
byproducts1. In the material document you can identify the by product by the
movement type –5452. By products are posted to the ‘Stock of material provided to the Vendor”
Due to the receipt of byproduct, the value of end product will be REDUCED. To transfer the byproduct quantities from the “Stock of material provided to
Vendor” to Unrestricted stock, make a transfer posting using the movement type –542
Subcontracting for Sales Order stock and Project stock
An account will be assigned to a sales order or a WBS elementSTOCK TRANSFER USING STOCK TRANSFER ORDER
Advantages of stock transfer with STO w.r.to transfer posting1. Good receipt can be planned in receiving plant2. Can include an additional vendors (freight, etc) in Stock Transport Order3. Delivery costs can be entered in STO4. It’s a part of MRP – PR created via MRP can be converted to STO5. Goods Issue can be done through Shipping delivery6. GR can be posted directly to consumption7. Total process can be monitored through PO history
PLANT to PLANT STOCK TRANSPORT ORDER 1 Step 2 Step Without SD With SD With Billing
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ORDER TYPE Area - MM-PUR UB UB UBMOVEMENT TYPE Area -MM-IM
DELIVERY TYPE Area - SD NL NLCCBILLING TYPE Area - SD IVDOCUMENT TYPE Area - MM-IV REPRICE Valuation Price Valuation Price Valuation Price Valuation Price Pricing in SD & MMPLANNING Via Reservation Purchase Order Purchase Order Purchase Order
STOCK after GIStock in Transfer Stock-in-Transit Stock-in-Transit
Stock-in-Transit Company code
DELIVERY COSTS Possible Possible Possible
CROSS-Company Code Via
Company code clearing account
Company code clearing account
Company code clearing account
Company code clearing account
Revenue account & GR/IR Clearing account
STOCK TRANSFER – PLANT to PLANT – 1 Step Carried out ONLY in Inventory Management Entered as a transfer posting – MB1B Can be planned by reservation The quantity of unrestricted stock entering in sending plant posts IMMEDIATELY
to unrestricted stock of receiving Plant Postings are valuated at the price of sending plant If it is between 2 company codes, it will create 2 accounting documents at the time
of goods issue
STOCK TRANSFER – PLANT to PLANT – 2 Step Carried out ONLY in inventory management Transfer posting CAN NOT be planned through a reservation Goods issue sending plant > Stock-in-transit of receiving Plant > Goods Receipt of
receiving Plant. Transfer posting (Goods issue-1step) is valuated at the price of sending plant If it is between 2 company codes, it will create 2 accounting documents at the time
of goods issue. If any offset, will post to Company code clearing account We can request and monitor stock transfer in purchasing through a PR, STO &
Scheduling Agreement For stock transfer scheduling agreement use document type –LU and item category
-U
STOCK TRANPORT ORDER WITHOUT SD DELIVERY Goods Issue Sending Plant > Stock-in-transit of receiving plant > Goods receipt of
receiving Plant Delivery costs CAN BE entered in ST Order
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Transfer posting (Goods issue-1step) is valuated at the price of sending plant If it is between 2 company codes, it will create 2 accounting documents at the time
of goods issue. If any offset, will post to Company code clearing account Process Flow
1. Creation of ST order in receiving Plant for sending plant with a document type UB in ME21N
2. Posting a goods issue through transfer posting –MB1B at sending plant with a movement type –351
3. Posting a goods receipt – MIGO at receiving plant with movement type –101
4. Invoice verification at receiving plant – Normal MIRO
STOCK TRANSPORT ORDER WITH DELIVERY Carried out in Purchasing (entering the STO), Shipping (delivery at sending Plant)
and Inventory management (GR at receiving Plant) Other characteristics are same as that of STO without delivery Process Flow
i. Creation of STO at sending Plantii. Post goods issue through delivery (VL 10B or 10F) at sending plant with
movement type 641iii. Goods receipt (MIGO) at receiving plant with movement type -101
STOCK TRANSPORT ORDER WITH DELIVERY & BILLING The transfer posting in NOT VALUATED at the
valuation price of the material of sending Plant. But defined in both the sending and receiving plant using conditions
Possible ONLY between plants at DIFFERENT COMPANY CODES
The areas are – Purchasing (STO), Shipping (sending Plant delivery and goods issue), Billing Plant (Creation of Invoice at sending Plant), Inventory management (Receiving Plant goods receipt) and Invoice verification (MIRO at receiving plant)
Goods Issue through Delivery > Stock-in-transit Company code at receiving Plant > Goods receipt at receiving plant
Prices in purchasing as per the conditions maintained in Info record and inter company pricing procedure
Goods movements are valuated as per the accounting documents generated.
4 Accounting documents are generated a. Goods Issue at sending Plantb. Goods receipt at receiving Plantc. Billing at sending Plantd. Invoice verification at receiving plant
Process Flow a. Creation of STO in receiving Plant for sending Plant. Document type –UB
and item category -Ub. Post delivery in sending Plant (Movement type –643)
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c. Creation of billing document in sending plantd. Post GR at receiving Plante. Post invoice at receiving Plant
GENERAL –INFORMATIONS ON STOPre-requisites for Goods Issue in Shipping
b. In customizing in Purchasing, a delivery type (NL for STO with delivery and NLCC for delivery & billing) must be assigned to the PURCHASING DOCUMENT TYPE (UB)
c. Customer number for receiving plant to be created and that MUST be maintained in customizing in STO
d. In SD customizing, shipping point determination MUST be maintainede. In material master, shipping data MUST be maintained
To display the stock-in-transit, we can use MMBE and MB53
Posting of GR for STO to a blocked stock is NOT POSSIBLE because the stock-in-transit is already valuated
No accounting document will be generated for a GR of STO
CROSS COMPANY STOCK TRANFERWe can do a cross company stock transfer in 3 ways
a. Stock transfer between 2 plants by 1 step or 2 stepb. An STO without delivery via shippingc. STO with delivery via shipping (possible for plants in different company codes)
In all cases the value of transportation is posted to a company code clearing account in both the plants. The stock transfer is valuated at the valuation price of the material in sending plant
Valuation of stock transport with billing- INTERCOMAPNY – EXAMPLE
Plant P1 orders 10Kg of material from Plant P2Value of the material at P1 – 10Price for inter company billing at P1 – 12STO order price – 11
Plant Transaction Value Account RemarksP1 Goods Issue 100(-) - Stock Account (at price of P1)
100(+) – Change inventory stocks (at price of P1)P1 Billing 120(-) – Sales revenue (Price –Inter Co billing)
Customer places an order on your company You are placing/ passing the same order to a Vendor Vendor supplies the material to customer directly Vendor submits his invoice to you You are submitting your invoice to the customer
Process Flow (with SD component)
1. Entering a Sales Order While entering a sales order with Item category S and account assignment ‘X’, system will automatically creates a PR for each item in the third party sales order.
2. Entering a Purchase OrderProcess the PR generated above, assign a Vendor and convert it to a Purchase Order The delivery address in the Purchase Order will be as that of the customer
3. Delivering goods to CustomerVendor supplies the material directly to the CustomerCan create a STATISTICAL GOODS RECEIPT in the system, but NOT mandatory.
4. Enter the Invoice of VendorInvoice verification of the Vendor invoice. This CAN be a mandatory requirement as per the customized settings (If customized for creation of billing document after the posting of Vendor invoice)
5. Creating Billing document for the CustomerBilling document is created in SD.Depending on the BILLING RELEVANT INDICATOR set for this item category in SD
The path in customizing for this is – SPRO > SD > Sales > Sales Documents > Sales Document Item > Define Item Category > Check the details of TAS.
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Billing Document cab be Quantity based on Order OR Quantity specified in Vendor Invoice
If the customer is billed on the basis of quantity, we CAN create billing document, IMMEDIATELY after the sales order is entered
If it is based on Vendor invoice, we CAN NOT create the billing document TILL the vendor invoice is entered/ posted in the system
Implications of Third Party Processing in SALES
By creating a Sales order for Third party, the resulting activities in Purchasing are 1. A Purchase Requisition will be created with one or more delivery schedule2. Purchase Requisition numbers are updated in the sales order (Item details)3. Item is scheduled automatically after considering the delivery time and
purchasing processing time from material master
Implications of Third Party processing in PURCHASING
A PR is created automatically. We can do LIMITED changes in this automatically created PR, like purchasing group
Order quantity / Scheduled Delivery date CAN NOT be changed manually. It can be changed through sales order ONLY.
We can create a PR for third party processing manually using Item category –S & account assignment –X
We can create the PO with respect to PR or manually GR Indicator- For account assignment category –X, GR can be
posted as per the customizing. If the Purchase Order is with respect to a Purchase Requisition, the
VENDOR ADDRESS CAN NOT be changed. If the delivery address is same for all items, the delivery address will
be printed on Header, other-wise it will be item-wise
Implications of Third Party processing in Inventory Management
We can enter the Goods receipt, if the GR indicator is set in PO Goods receipt for third party processing will be similar that of a GR for a PO with
account assignment
RETURNABLE PACKING (RTP) – VENDOR PROCESSING
It’s a multi-trip packaging medium Property of your Vendor came along with material, stored at your place It is NOT VALUATED It is managed as a SPECIAL STOCK. So special stock data is required in addition
to material master data. Special stock Indicator is ‘M’
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The special stock data is defined for EVERY vendor at storage location level. It is created automatically 1st receipt is posted to RTP stock.
This RTP stock can not be maintained manually, but updated automatically upon goods movements.
RTP is an UNRESTRICTED STOCK ALWAYS Allows a Negative stock We CAN NOT transfer RTP stock to your own stock At Goods receipt, the movement type for RTP ‘501+M’ is selected automatically by
the system. For returns, ‘502+M’. Can use Goods Issue –Others for returning to Vendor with 502+M
If we want to transfer these RTP material between storage locations, system selects the movement type –311+M
RTP stocks are available in stock displays – MMBE / MB53
PIPLINE MATERIAL PROCESSING
Material is ALWAYS available. It can be withdrawn any quantity at any time These PIPE materials are NEITHER PRODUCED/ PROCURED Nor STORED Pipeline movements are mandatory in all Valuation areas For each material type, you can specify in the valuation area whether pipeline
movements are Mandatory/ Allowed. Info record is mandatory for movements Pipeline withdrawals are to be for a Order/ Cost center Considered as a special stock The special stock indicator is “P” Withdrawals are valuated at Info record price. Withdrawals leads to a payment
liability to the Vendor and it’s Consumption history is updated. In standard system, the same account is assigned for consignment and pipeline. But
it can be separated by settings in customizing Process Flow
1. Creation of PIPE material . Maintain purchasing and accounting views. Price control can be S or V
2. Creation of Info record 3. Maintain the source list (Not mandatory) 4. Posting of Goods Issue – Movement type can be – 201+P, 261+P, 281+P/
291+P5. Settlement of Pipeline Liabilities (MRKO)
SALES ORDER STOCK
Stocks maintained for sales order Special stock Indicator “E” It can be Valuated / non valuated If it is NOT valuated, it is managed via a Cost Center
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Can be transferred to own stock using movement type – 411+E
PROJECT STOCK
The stocks stored for a Project till the completion of the project It can be valuated / non valuated It is allocated to a WBS element (Work Breakdown Structure) Components from this stock can be issued for a WBS element The stock is available for MRP Managed with a special stock Indicator ‘Q’ It can be transferred to own stock using the movement type – 411 +Q
13 PHYSICAL INVENTORY MANAGEMENT Physical Inventory is carried out for Company own stock and special stocks Carried out at storage location level A separate PI document is created for each storage location, even if the stock at that
storage location is ZERO Physical Inventory is connected to Logistics Information system
Types of Physical Inventory PROCEDURES are;i. Periodic (like once in a year)- Carried out on Balance sheet key date. Every material
must be counted. Entire warehouse will be blocked for material movementsii. Continuous – It will be continuous process in the entire fiscal year. Ensure that each
and every material MUST be counted at least once in a yeariii. Sampling – Random selected stocks are carried out on a balance sheet key date.iv. Cycle counting (by cycle counting the indicator of Cycle counting in material
master will reset) – By a cycle
Stock type included in Physical Inventory methods are i. Unrestricted
ii. Quality Inspectioniii. Blocked
Constraints of time in Physical Inventory1. The posting period is automatically set during counting . So the differences are to be
posted in SAME posting period2. The fiscal Year is set . All subsequent postings are to be posted in the same fiscal
year.
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Physical Inventory process
i. Preparation Create a physical inventory document, print and distribute itBlock the materials for postings
ii. Physical Inventory Counting Stocks are counted and count results are entered in the count list by using ‘enter PI count’ transaction
iii. Physical Inventory Check List out the quantity difference with respect to the quantity in the bookIf required, re-counting can be initiatedIf the differences are acceptable, we can post and stocks are corrected accordingly
Physical Inventory number (PI No) – Number for a group of Physical inventory documents
We can assign PI No to a PI document for extra selection criteria for PI reports like PI doc for Storage locations/ Vendor/ Customer, etc.
Before starting the Physical Inventory count, please see that:i. Free the book inventory balance
ii. Set zero count automaticallyiii. Tolerance for posting of inventory differences
While entering the count result for zero counts, don’t leave the space as it will be considered as it is NOT COUNTED. If the count is zero, specifically fix zero count (ZC)
If the Physical Inventory document is created immediately before the count, block the relevant materials while creation of Document itself
If the PI document is NOT created immediately before the count, block relevant material later by CHNAGING the PI document at that time.
Blocking will automatically will be CANCELLED when you post the counting results for the PI document
Posting of physical Inventory difference WILL create a MATERIAL DOCUMENT and ACCOUNTING DOCUMENT
PI documents can be single document or sessions In customizing we have to specify whether the FREEZING of book inventory
balances in storage locations are allowed or not. From easy menu, you can freeze the movements in the document itself. If you have initiated recount for an item, then we CAN NOT change the count
afterwards. Recounted items are deactivated in the original document and no longer processed
by entire document. In Customizing we can set the TOLERENCE LIMT for Physical Inventory
differences1. Maximum amount per Physical Inventory DOCUMENT2. Maximum amount per Physical Inventory ITEM
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After posting the Physical Inventory differences, system will issues a message “ Difference for Inventory document “NN” posted with Material document “MM”
Physical Inventory of COMPANY OWNED STOCK – while posting the difference, the material Master record (NOT Material Price) is adjusted automatically for the value (For this adjustment, either GR or GI is required)
Case1 – If the counted quantity < actual book stockThe offsetting entry WILL post as “Expenses from Physical Inventory” with a movement type –7
Case2 - If the counted quantity > actual book stockThe offsetting entry will post as “Income from Physical Inventory” with a movement type -7
In both the cases, the amount posted is on the basis of Price control (S or V) set in material Master. The Physical Inventory difference posting WILL NOT lead to a PRICE CHANGE in Material Master
Physical Inventory of a CONSIGNMENT STOCK - In Consignment also, by posting a Physical Inventory difference, the material master record price will not change.Since the material is not managed by VALUE, from the accounting point of view, there is No Posting. But still accounting document WILL be created
Case1 – If the counted quantity < actual book stock – The system assumes that the difference was withdrawn from the stock.While posting the difference, account movements are similar to that of a Transfer posting from consignment to Own UR stock. But he amount will be posted to “Expenditure from Inventory differences”.Case2 - If the counted quantity > actual book stock – The system assumes that more issues are posted. So inventory difference is posted as a reversal of Goods Issue, but the amount will be posted to “Payable from Consignment Stock”
CYCLE COUNTING
Cycle counting indicator is set for each of the material in material master(Manual) It defines the counting of physical inventory intervals in a fiscal year Cycle counting indicator can be set automatically by ABC analysis of stock
Transaction Code – MIBC) In ABC analysis, the cycle counting indicator is updated as per definition of A,B&C
and periods ABC analysis can be done through transaction code – MC40- User based ABC
analysis and MC-41 –Requirement based ABC analysis
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Program RMCBIN00 allows you to carry out an ABC analysis to classify the materials according to either by consumption or by requirements
The cycle counting indicator in material master can be updated automatically during cycle counting analysis.
The interval between inventories for each cycle counting indicator is set in customizing
Cycle counting Indicator can be fixed. If it is fixed, the status (present status A or B or C) will not change due to the program run.
Program RM071CN1 creates Physical Inventory documents for cycle counting. It checks all cycle counting materials to determine whether Physical Inventory is DUE or not (Transaction Code –MICN)
INVENTORY SAMPLING
It is based on statistical procedure Procedure – A sample is randomly selected from the stock management units for
which a PI is to be carried out and then counted. The sample size depends on the probable degree of confidence you require when using the data obtained from the sample to make inferences about this entire stock management unit. The data posted for the sample stock is extrapolated, and then applied to all the stock management units included in the PI procedure. If the deviation between extrapolated value and book value is very small (order of 2%) , then this procedure is considered to be successful.
At Invoice VerificationGR/IR clearing - Debited (+)Vendor - Credited (-)
At PaymentVendor - Debited (+)Bank cash - Credited (-)
At Goods IssueConsumption - Debited(+)Stock Account - Credited (-)
Valuation Area – Can be at Company code level or Plant level. SAP recommends the valuation at Plant Level.
Valuation at Plant level is MANDATORY if we want to use Production Planning (PP) or Product costing accounting components or retail system.
Once the valuation area is defined In the customizing, it is very DIFFICULT to reverse it.
If you want to have a storage location for storing materials non-valuated, you can have it through another Plant(Valuation area) where only quantity updation will take place
The transactions in inventory management that affects accounting are Goods Receipt, Goods Issue and Transfer Posting
These transactions can change the valuation price of the material depending on the price control of the material
The posting of invoice verification (MIRO) also can affect the material valuation Material Valuation during :
1. RECEIPTS – are valuated at current material price in the material master2. a) GR for PO – GR before IR –Materials are valuated at PO Price
b) GR for PO – GR after IR – Materials are valuated at Invoice price3. GOODS ISSUE – Goods Issues are valuated at the current price of the
material in material Master.4. Free Delivery – Zero Value
Materials that are to be valuated should have accounting data with valuation Class Material Price Control
1. In standard pricing (S ), Material is valuated at material master price and in case any
difference, will be posted to Price Difference Account (PDA)
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Exact value available for cost accounting/ Controlling purposes In accounting view, the difference can be displayed. The changing of this standard price in material master is possible
2. In moving average pricing (V), GR at PO price and GI at material master price. Receipts are valuated
at actual price (PO or IV) In case of any difference, the difference is posted to Stock account, if
sufficient stock available (in such case, the MAP will be changed)or it will be posted to a PDA.
System modifies the price in material master according to the delivered price
If the data is used for cost accounting, will have fluctuations
If the material is managed at Standard price, the moving average price will be recorded in the material master by the system
Changing of Material master price (MR21) from Standard to Moving average price is ALWAYS possible
Changing of Material master price from Moving average price to Standard is NOT POSSIBLE in 2 cases
1. If the material is valuated in SPLIT VALUATION2. If the standard price is coming from COSTING and is NOT equal to the
moving average price3. Changing fro S to V & V to S are Possible, if POs are Not created or Stocks
are not existing Periodic Unit Price (PUP) – Price that changes periodically as a result of goods
movements and invoice postings PUP = Value of material / Quantity of material PUP is used in single level or multi level price determination to valuate the material
for closing period. PUP can carryout in 3 currencies and 3 valuation areas The valuation in current period, system uses standard pricing.
VALUATION AND ACCOUNT ASSIGNMENT For automatic account determination The system will automatically determine the relevant G/L accounts for each
transaction in MM. There are several accounting transactions are linking to a single MM Transaction We can configure the automatic account determination facility to occur within the
areas of Inventory management, Invoice verification and material valuation Valuation area to be set before creating a material Company code chart is assigned in FI module Levels of valuation in automatic account determination
1. Chart of Accounts/ Company Code2. Valuation area3. Material Type/ Valuation class4. Transactions (Movement type)
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1. Chart of Accounts – Influencing Factors Chart of account is assigned to company code Used as a key factor for account determination to enable a differentiation for
the purpose of G/L account assignment Configure separately for automatic account determination Financial accounting, Cost & Revenue accounting uses the optional chart of
Key for account determination that enables a differentiation for G/L account assignment WITHIN Chart of accounts
By Valuation grouping code, dependency of accounts on Valuation area If a valuation grouping code is there assign a code for each valuation area Valuation Area is the level at which the materials are valuated If the valuation is at company code, G/L account CAN NOT be assigned
according to Plant We can assign a totally different G/L accounts to Plant if it is having a
separate Valuation grouping code
CHART OF ACCOUNTS
COMPANY CODE
PLANT
VALUATION GROUPING CODE
3. Material Type – Material – Influencing Factors It’s a key in account determination that enables a differentiation for G/L
Account assignment depends on Material Material is assigned to a Valuation class, which depends on a Material type More than 1 material type is allowed for a valuation class
MATERIAL TYPE A/C ASSIGNMENT VALUATION CLASS CATEGORY
It’s a key for account determination that symbolizes the transaction Posting transactions will define the relevant accounting
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Posting records are assigned to each Movement type to each invoice verification
a. Account groupingDepending on Movement type and special stock indicators, we can assign an account grouping for individual transactions.We can use the rules to define its configuration of automatic postings for a posting transaction depends on
1. Valuation Grouping code2. Account grouping3. Valuation class
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COMPANY CODE Chart of Accounts
Valuation Area Valuation Grouping Code
Material Material Type
Account CategoryReference
Valuation Class
Business Transaction(Movement Type)
ValueString Transaction
Event Key
Account Modifier
1
2
3
4 5
General Ledger ACCOUNT
Account determination Overview
ACCOUNT GROUPING TABLE
Movement Type
Value String
Account Modifier
201 WA01 VBR
GOODS ISSUE TO COST CENTER
Movement Type 201 MATERIAL MASTER VALUE STRING - WA01Plant 1000
Valuation area1000
ACCOUNT MODIFIER (KEYS)
Material MValuation class
3000BSX GBB PRD
Price control V
VALUATION GROUPING TABLE
Valuation area
Valuation grouping code
1000 0001 ACCOUNT DETERMINATION TABLEKEY of Account modifier
Valuation grouping code
Account Modifier
Valuation Class G/L Account
GBB 0001 VBR 3000XXXX
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Influencing factors – Summary
Organization Structure Company Code Chart of accountsPlant/ Valuation area Valuation grouping code
Material Accounting data Valuation ClassMaterial Type
Value stringTransaction Event key
Business Transaction Goods movements/ Account groupingInvoice verification
Value String (Key)
Movement type AccountGrouping Code
Account Modifier
Default accounting – The system proposes an account depend on the account assignment. The system uses the Account grouping for an account assignment category to determine this account
Changing of Valuation level (Co code to Plant or reverse) is NOT possible in a production system because we have to convert material accounting data and documents which are time consuming
The ACCOUNT DETERMINATION is always NOT DONE at Plant specific basis because
- The valuation level is the Plant- The valuation grouping code is activated- Valuation grouping code is assigned to each Plant We can assign Only one chart of account to a company code The valuation grouping code is used for valuation area – Specific differentiation
between account determination. At the same time it allows you to arrange and group together valuation areas for a clear-cut account assignment
We can use the valuation classes differently for material types belonging to other material types.
We CANNOT assign several account category references to one material We can assign several material type to One account assignment category Valuation class enables assignments to account on the basis of specific to material
type and material The account category reference is used to SIMPLIFY the assignment of permitted
valuation classes to the material type For the transaction - offsetting entry for inventory posting, the account are assigned
depending on the account grouping
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We can assign account grouping itself to the movement type. Changing the material valuation price (MR21) DOES NOT involve changing the
material master because it is an accounting transaction in which the total stock for a plant is revaluated
If the PRICE CARRY OVER INDICATOR is NOT set, the system changes the material valuation price for the previous period or year and the current period price is UNCHANGED. This case it will generate 2 accounting documents
ACCOUNT DETERMINATION – Specific InformationAccount determination is required if the system is to fulfil its integration promise and post financial transactions at the same time as the relevant operational transaction.Accounts are determined differently, depending on which functional area you are using: MM: The process of account determination varies depending on whether the transaction involved has a movement type such as inventory management or whether there is no movement type such as invoice verification and valuation.Account determination in SD uses the condition technique.This chapter looks at the account determination of MM transactions w. and w/o movement type only.You can do most of the settings relevant for the account assignments for MM transactions either in the configuration menu for "valuation/account assignment" (settings for MM transactions w. movement type) or in the configuration menu for "invoice verification" (settings for MM transactions w/o movement type). You will get to the same tables but there are different simulation functions.It is also possible to access these tables via the configuration menu for accounting.
The valuation area is the level at which material valuations are carried out. In the MM application transactions, the valuation area is hidden. In customizing, you can choose whether the valuation area equals the company code or the plant. This setting must be carried out before creating materials and before entering transactions in MM inventory management. If PP is active the valuation area must be on plant level !
Grouping of organizational entitiesThe allocation of a company code to a chart of accounts is carried out in the FI customizing. The chart of accounts to be used is determined for each company code.The valuation grouping code facilitates the allocation of G/L accounts with as little effort as possible. Valuation areas to be treated equally in terms of account assignment must be defined with the same valuation grouping code. Valuation grouping codes either serve as a means of fine differentiation within a chart of accounts or they correspond to a chart of accounts.When making the basic settings for valuation, you can specify whether the valuation grouping code is active.
Grouping of material master entitiesAccount category reference is the grouping term for account determination depending on the material type.
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Several valuation classes can be allocated to one account category reference.Each material type is allocated to one account category reference. When maintaining the accounting data of a material of this material type, you can select one of the valuation classes that are defined for the corresponding account category reference.The G/L account determination for a material is carried out according to the settings for this valuation class.
Via the Account category reference You can define the same G/L account determination for all materials of one or even several material types.But you can also specify that different G/L accounts are determined for different materials of a material type.
ACCOUNT DETERMINATION PROCEDURE
Procedure Part1 – Value String Processing Keys The G/L accounts affected by a particular transaction are specified in a posting record. The debit postings are always specified first.In the SAP System, it is pre-defined which MM transactions have accounting significance (i.e. affect the FI module). As individual SAP users have different charts of accounts, generalized posting records are allocated to each transaction (these are called value strings). Value strings contain processing keys (also called transaction or transaction/event keys) for the relevant posting transaction. You can (but it is not recommended) change the processing keys contained within a value string but you cannot change the processing keys themselves (nor can you create/delete them). You can determine which G/L accounts are assigned to the processing keys.
Therefore:The value string is a set of processing keys (see table T156W) required to fulfil the account postings for a certain movement type/material type or transaction type/material type combination.A processing key is used to determine the accounts and posting keys for line items which are created automatically by the system. The main difference between movement type-based/non-movement type -based MM transactions in terms of customizing is the allocation procedure for the value string and processing keys.
Procedure Part 2- Processing Keys - RulesEach processing key in the value string determines the following information for its postingthe FI posting key to be used for debit and creditthe rules (see next page) and whether account modifications are to be taken into account together with the rule and the chart of account the G/L account"The account modification is a key which has a different meaning depending on the procedure which is used to differentiate the account determination. The meaning is predefined in the system and cannot be changed." [SAP Help on the field]
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It is possible to include a extra key (account modification key) for a processing key within a particular value string / movement type combination (see Customizing "new movement types"). If an account modification key is added to a processing key it is only active within that particular value string and "type of movement" (different settings for one movement type e.g. 101: GR w. reference to a purchase order and GR with reference to a production order, see "new movement types", view posting control).Example: In the MM all offsetting entries for inventory postings are grouped under the processing key GBB. In fact there are (or may be) different offsetting entries e.g. for GR from production (MType 101) or GI for cost center (MType 201). In that case the account modification is used to determine the relevant account number using the account modification AUF and VBR.The account modification key itself seems to be a hard coded processing key (e.g. AUF).
Procedure part 3 – Account allocationAccount allocation depends on the chart of accounts and on the transaction (processing key).You can set further account determination keys in the rule definition.The rules specify whether there can be different G/L accounts for credit and debit postings and whether the valuation class and/or the valuation grouping code and/or account modification should be used when determining the G/L account.If account modification is active, a new processing key is found and used to determine the relevant rules. In the MM Rel. 2.2 only the processing key GBB (offsetting entry for inventory postings) uses account modifications e.g. for the order settlement (processing key AUF).
Account determination Procedure – OverviewStep 1: Determination of the value string for movement type-based MM transactions can be viewed via the menu option: Tools -> Customizing -> Configuration -> Logistics -> Material Management -> Inventory Management -> Transactions -> Movement types -> New movement types (Transaction code OMBQ) Choose view "Posting Control".Step 2: Determination of the value string for non movement type-based MM transactions can be viewed via the tables: T169 and T169W.Step 3: Determination of the processing keys:a.) Movement type-based MM transactions: Table T156Wb.) Non movement type-based MM transactions: Table T169AStep 4: The G/L account to be used in a given circumstance (Rules) is set up via one of the following menu options (different simulation functionality !): Tools -> Customizing -> Configuration -> Logistics -> Material Management -> Valuation / acct assg. -> Configuration -> Acct determination -> Automatic posting.Tools -> Customizing -> Configuration -> Logistics -> Material Management -> Invoice verification -> Master data -> Automatic posting
When customizing the account determination process, a valuation grouping code is first selected (this also implies a chart of accounts). After this, a posting transaction is selected for the configuration of the G/L accounts. This determines the processing (or transaction)
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key and the account modifications relevant for this transaction. After this, the relevant G/L account can be allocated for the individual valuation classes.A simulation function supports the checking of the settings made.
Account Determination Procedure: Overview
LegendInformation derived from Transaction typeInformation derived from Material MasterInformation derived from the organiz. Structure
Main Customizing area
Movement type basedTransaction
"Type ofMaterial"
Step 1 or 2 MaterialType
Plant
ValuePosting String
Qty.Posting String
Step 3
ProcessingKey (GBB)
Company Code
Chart ofAccount
ValuationClass
Val. GroupingCode
Rules
Step 4
G/L Account
AccountCateg. Reference
MaterialMaster
Type ofTransaction
Non-move-ment type based
Transaction
Accountmodification
ProcessingKey (AUF)
SPECIFIC INVENTROY MANAGEMNT FEATURES
1. SPLIT VALUATION
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o It is one of the specific inventory management features of SAP R/3 (Others are Non-valuated materials and RTP)
o Valuation Category – indicates whether the material is valuated as one unit or in parts (Set in Material Master)
o Valuation Category is the key that indicates the criteria for defining partial stock and it determines which valuation type is allowed
o Valuation Type – is the key that identifies split valuated stock of material and indicates the characteristic of partial stock (Enter in the BATCH FILED of goods movements)
o Example for valuation categories are – Procurement type, Origin, Quality
o Examples for Valuation types are Internal & external, Italy & France, A,B,C
o Rev. 4.5A onwards, we can enter valuation type directly in the item table within stock determination enabling you to move conveniently determining stocks for withdrawal of material with Split Valuation
o Stocks and stock values of split-valuated material are cumulated at Valuation area level. Moving average price control is same for total area.
o System creates a valuation record containing specific valuation data for each valuation category used.
Settings of Split valuation1. Define Global Types – It can be procurement type (Internal / External) OR account
category reference2. Define global categories – It can be Type to be used in Internal or external
procurement OR indicator “creation valuation type” automatically3. Define Local definitions – Assignment of categories created to original units.
(change type/ categories locally. Define account category reference for a valuation type. While creating material master, choose valuation class for this account category reference)
Procedure for SPLIT VALUATION - transactional
1. While creating the material master select valuation category and save it.2. Again go to Material master, while entering system will ask for Valuation type in
accounting view. Enter the valuation class, price and save.3. Again go to material master and repeat the procedure for 2nd valuation type.4. The valuation type for each valuation category is fixed in customizing
To select split valuation, proceed as follows:1. Determine the valuation categories and valuation types that are allowed for all valuation areas:global valuation categories via menu "Goto --> Global Categories"global valuation types via menu "Goto --> Global Types"2. Allocate the valuation types to the valuation categories.a) Select "Goto --> Global Categories".
b) Position the cursor on a valuation category and select "Goto --> Global Categories --> Allocations --> Types->Category".c) Activate the valuation types you want.3. Determine the local valuation categories for each valuation area.a) Select "Goto --> Local definitions".b) Position the cursor on a valuation area and select "Goto --> Local Definitions --> Allocate Categoires->Org.units". You obtain a list of the global valuation categories.c) Activate the categories to be used in this valuation area.The system creates the local valuation types based on the allocations under point 2.Only now can you create a master record with split valuation.
NON-VALUATED STOCK MATERIAL (UNBW)
For maintaining, stock only (Generally LOW VALUE items) materials material type Non-valuated stock material – UNBW is used
This material type will not have any Accounting view in material master because it is not maintained with any Value
We CANNOT post a GR for a UNBW material directly for consumption The storage of material will be to Warehouse and then issued for consumption. It is
not having any value, only Quantity No accounting document will be generated during transactions UNBW materials Vs Raw Materials
UNBW Material Raw Material
Purchase Order With A/c Assignment Can be with or without
GR Quantity To Warehouse Can be to warehouse or Consumption
GR Value To consumption A/c Can be to stock OR consumption A/c
Stock withdrawals from UNBW material type are NOT valuated. We can get update reports on stock levels at any time for UNBW materials
(Quantity)
RETURNABL TRANSPORT PACKAGING MATERIALS (RTP)
It’s a multi-trip packaging medium Property of your Vendor came along with material, stored at your place It is NOT VALUATED It is managed as a SPECIAL STOCK. So special stock data is required in addition
to material master data. Special stock Indicator is ‘M’
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The special stock data is defined for EVERY vendor at storage location level. It is created automatically 1st receipt is posted to RTP stock.
This RTP stock can not be maintained manually, but updated automatically upon goods movements.
RTP is an UNRESTRICTED STOCK ALWAYS Allows a Negative stock We CAN NOT transfer RTP stock to your own stock At Goods receipt, the movement type for RTP ‘501+M’ is selected automatically by
the system. For returns, ‘502+M’ If we want to transfer these RTP material between storage locations, system selects
the movement type –311+M RTP stocks are available in stock displays – MMBE / MB53
Process flow of RTP1. Create Master record for RTP by selecting the material type “returnable
transport Packaging” – LEIH2. Create the PO for the base material (Not include any RTP at PO Level)3. Do goods receipt
After entering the base material, click on the icon, “Transport equipment”, which is below the item overview. Check for the movement type selected by the system as 501+M in “where” tab. Go to the material tab and enter the RTP material created and enter the storage location (where the RTP is to be maintained)Post the GR and see the accounting document by display. There WILL NOT be any accounting document created for RTP
4. If you want to send back the RTP materialSelect Goods issue MIGO or mb1c (others) and select the movement type –502+M, enter the data and save
INVOICE VERIFICATION
Invoice verification process the invoice in FI. By posting an invoice the data in MM & FI are updated.
UPDATION IN UPDATION INMATERIALS MGT. ACCOUNTING
1. PO Update 1. G/L accounts update2. PO History update 2. Assets update3. Delivery cost update 3. Cost center update4. Mat Master update 4. Projects update5. Vendor master update 5. Orders update
Invoice verification works in conjunction with Purchasing and Inventory management We can post an Invoice with respect to
1. A Purchase Order
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2. A Service Order3. A Goods Receipt
While posting an Invoice in the system, system will 1. Vendor account and GR/IR clearing accounts are
updated2. MAP and Value will be updated in Material Master3. PO History updated with GR, Down payment, Invoice
GR/IR clearing account is debited and Vendor is credited
In MAP price control, if the PO Price and Invoice prices are varying from the material master price, then the difference is distributed to the stock (If sufficient stock available or it will post to price difference account). So the price in material master is fluctuating with respect to invoice posting
In Standard price control, the difference is booked in price difference account and the material master price is CONSTANT.
GR based Invoice verification is set at – PO, - Vendor master record
1. Material is directly posted to 1. It’s a distributed systemmaterial & G/L account
2. ONLY FI document is created 2. Unlimited multiple selection3. Unplanned delivery cost postings 3. Option of IV in background
is NOT possible 4. Invoice reduction facility5. FI & MM Documents on posting
BASIC INVOICE VERIFICATION PROCESS
Structure of Invoice verification screen1. Transaction Area – Defines the entry for Invoice/ Credit memo2. Header Area3. Allocation area – Assign reference (PO or delivery note, etc. )4. Invoice Items5. Vendor data6. Balance area7. PO Structure area
Basic Invoice structure1. While referring the PO number, the following information are copied by the system from the PO
- Vendor detail- Payment- Currency- Bank information- Invoice items, etc.
2. from PO History, the following information are derived
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- Quantity- Amount
3. System proposes -RATE OF TAX –as per the settings4. We have to ENTER
- Document date- Purchase order number- Invoice amount- Tax amount- Terms of payment (default)- The terms of payment can be changed at MIRO level
A. Selection of Invoice for B. Payment Block for C. Posting type selection for D. Allocation -Invoice posted against E. Reference F. Display Variant selection
A. Invoice selection for - OPTIONS1. Invoice2. Credit Memo3. Subsequent credit4. Subsequent Debit
B. Payment Block for (In Payment tab of Header)1. Blocked for payment2. FREE for payment
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3. Invoice verification4. Payment clearing
C. Posting Type selection for (Details tab in Header)1. Asset posting2. Accounting document posting3. Net asset posting4. Customer Invoice/ Payment5. G/L account posting6. Vendor account document/ Invoice/ Payment7. Vendor credit memo8. Subsequent credit settlement9. Gross Invoice receipt10. Net Invoice receipt
D. Allocation – Invoice can be against a 1. Purchase Order/ Scheduling agreement2. Delivery Note3. Bill of lading (Delivery costs)4. Service Entry Sheet (SES)5. Vendor6. Transportation/ Service Agent
E. Reference of 1. Goods/ Service items2. Planned delivery costs3. Goods/ Service items + Planned delivery costs
F. Display variant selection1. Accounting assignment ( Cost center/ Asset/ Order)2. All information3. Invoice reduction4. Purchase Order - Order price quantity5. Purchase Order History6. Purchase Order delivery note7. Purchase Order entry sheet8. Purchase order – Juridiction code9. Services10. Shipments11. Aggregation
- Configurable material- Delivery note- Material- Plant- Purchase Order
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Unplanned delivery cost will be posted as DEBIT MEMO in invoice entry sheet, if the invoice is separately for unplanned delivery cost
In the payment block option in ‘Payment’ tab of the header data, we can block the invoice MANUALLY
If we want to post an invoice of ‘Free for payment’, use the option free for payment
We can define new display variant in customizing
Payment terms are defined in PO. While entering an invoice, the system displays the terms as per PO, but can be changed
INVOICING PLAN
We can define installment conditions in Customizing.
If we enter an installment condition in Invoice verification, system creates a separate vendor line in accounting document for each transaction at the time of posting
For Invoicing Plan – At Purchaser Order FO and NB document types are not acceptable.
Invoicing Plan NOT possible for Valuated Good receipts. So Non-valuated GR tick is a MUST in delivery tab of item detail
GR based IV is NOT possible. Only PO based IV
Account assignment should be ‘K’. ie ONLY for consumable materials
Validity data to be entered in PO at additional data tab in header
PO BASED INVOICE VERIFICATION
Invoices are verified with respect to a Purchase Order
The system will suggest the quantity (Invoiced qty/ delivered quantity)
If we are posting against a delivery note number, the system will check it’s PO and then give the detail
Disadvantage 1. If there are several GRs and invoices for a single PO, the PO HISTORY will
not give detail like “which invoice came from which Vendor”2. The pre-requisite selection is fixed at PO itself (No tick for GR based IV)
Advantage – Posting of an invoice before its GR as per the scenario(Example – Clearing of an invoice against LC)
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GR BASED INVOICE VERIFICATION
Advantage – Invoices along with Vendor details against a GR
Disadvantage – Posting of an Invoice before GR
- Invoice quantity should not be greater than the delivered quantity in GR. But we can post a larger amount
- We can hold an invoice using ‘HOLD’ function available in MIRO
TAXES in INVOICE VERIFICATION
Tax codes are defined for each tax rate in customizing in FI (FTXP)
The tax codes are attached in PO
CASH DICOUNT in INVOICE VERIFICATION
We can enter the cash discount in 2 ways1. GROSS Posting – If the invoice posting is Gross, the system IGNORES Cash discount amount. Posts the cash discount to cash discount account at the time of posting. So cash discount account is NOT credited to Stock/ Cost account.
2. NET Posting – If posting is Net, system posts the cash discount amount to the stock/ cost account. Cash discount clearing account at the time of payment. So select NET posting for cash discount.
Posting of Invoice Net or Gross depends on the document type selected
Document type is defined in customizing in such a way that the postings will be on gross or net.
Even during the invoice entry, we can change the document type in ‘Details’ Tab in header
In case of gross invoice posting, cash discount will be credited to “Non operating result’ at the time of payment.
In case of net posting, cash discount is debited to ‘Cash discount clearing account” at the time of invoice verification and credited to “Cash discount clearing account” at the time of payment
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If the material price control is “V”, the cash discount will be credited to Stock account. If it is ‘S”, then it will be to Price difference account
If the PO is in foreign currency, we can use “FIXED” exchange rate. Then the system uses this exchange rate to convert the foreign currency to the local currency at the time of GR and IV
If it is “NOT FIXED” in PO, then the system uses the current exchange rate to convert the foreign currency to local currency at the time of GR. In IV also system suggests the same exchange rate, BUT WE CAN CHANGE it
If the exchange rate is NOT FIXED in PO, the exchange rate differences can occur as the use of different exchange rate. Its just like as a price difference. It will be posted to “Exchange rate difference account” as per the customizing. (To a separate account or add to the existing)
VARIANCES AND INVOICE BLOCKING
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We can set tolerance limit for each type of variance in customizing. There are 4 types of tolerances.
1. Vendor specific 2. Invoice block 3. At Purchasing level (Order price)4. At Goods receipt (Quantity)
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1. VENDOR SPECIFIC TOLERANCES
The path is LIV > Incoming Invoice > Vendor specific tolerancesThese tolerances are COMPANY CODE LEVEL & ON TOTAL INVOICE
1. Automatic acceptance of Negative differencesa. Absolute Lower limit
i. Check Limit (Check box)ii. Negative acceptance lower limit – Value
Path – LIV > Invoice block > Set tolerance limitsThese tolerance limits are at COMPANY CODE LEVEL and ITEM-WISE INVOICE VALUE
Most popular types of invoice blocks are:1. Amount of item WITHOUT Order reference (AN)
Upper Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Value -------
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2. Amount of Item WITH order reference (AP)Upper Limit
- Absolute – Do not check (Radio button)- Check Limit (radio button) – Value -------
3. From small difference automatically (BD)Upper Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Value -------
4. Percentage Order price unit variance (IR before GR) - BRUpper Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Tolerance limit ------%Lower Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Tolerance limit ------%
5. Percentage Order price unit variance (GR before IR) - BWUpper Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Tolerance limit ------%Lower Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Tolerance limit ------%
- Absolute – Do not check (Radio button)- Check Limit (radio button) – Value ------- Percentage– Do not check (Radio button)- Check Limit (radio button) – Percentage ------%
8. Price Variance (PP)
Upper Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Value ------- Percentage– Do not check (Radio button)- Check Limit (radio button) – Percentage ------%
Lower Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Value ------- Percentage– Do not check (Radio button)- Check Limit (radio button) – Percentage ------%
9. Price variance – ESTIMATED PRICE (PS)
Upper Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Value ------- Percentage– Do not check (Radio button)- Check Limit (radio button) – Percentage ------%
Lower Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Value ------- Percentage– Do not check (Radio button)- Check Limit (radio button) – Percentage ------%
10. Date Variance – Value x days (ST)
Upper Limit- Do not check (Radio button)- Check Limit –Value -----
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11. Moving Average Price Variances (VP)Upper Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Tolerance limit ------%Lower Limit- Absolute – Do not check (Radio button)- Check Limit (radio button) – Tolerance limit ------%
3. PURCHASE ORGANIZATION LEVEL
1. PE2. SE
4. AT GOODS RECEIPT
If the variances are within the tolerance limit, the system displays message as per the customizing
If the payment is automatically blocked due to the (settings) exceeded the units, payment block is filled in the Vendor line item of the FI document
Payment block is filled in MM document when an invoice is blocked MANUALLY (at header level of MIRO)- Not in item level
Manual block of an invoice done at tab “Payment” in header ( “Payment block” ) of MIRO screen. In this case in Vendor line item (after posting the invoice) the reason for block will be displayed as “A” (payment Block)
In other cases, payment block due to variance by system and manual block made in item level (during MIRO), the reason for block (after the invoice posting) in the vendor line item is “R” (Invoice verification)
If once the invoice is blocked, we have to clear it separately
Header Manual Block – A – In MM & FI Other blocks – R – In FI only
BLOCKING VARIANCES
1. Quantity2. Price3. PO Price Quantity4. Date5. Stochastic6. Quality7. manual
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1. Quantity Variances (Q)If the Invoice qty > GR quantity, the difference posted to GR/IR clearing account. Total payment will be released to the Vendor.System expects another GR. At that time this additional amount in GR/IR clearing account will be cleared.
2. Price Variance (P)In this case the account movements depends on the Price control (S or MAP) set in material master.a) If IR is after GR
If the price control is ‘S’ – The difference will be posted to Price difference AccountIf Price control is “V” – The difference will be posted to the stock account, if sufficient stock available(it will lead to the change in price of the material), otherwise to Price difference account
b) IR before GRSystem posts the variance to GR/IR clearing account.The segregation of this amount depending on “S” or “V”, will be done at the time of GR posting
3. PO price quantity4. Date (D)5. Stochastical Blocking
It is at COMPANY CODE LevelInvoices do not contain a blocking reason, can be blocked stochastically (at random)It will be as per the customizing done for the threshold value.An invoice blocked stochastically, system sets a payment block in vendor line item in the FI document. Individual item WILL NOT contain a blocking reason.
6. Blocking due to QUALITY Material is subject to Quality Management fixed in Material Master. While posting GR, system will create an inspection lot System will block in this case, if there in NO user decision on inspection lot/
rejected in Inspection. (To be entered in the system)
7. Manual Blocking
a) Manual blocking can be made at HEADER Level. In payments tab in MIRO screenb) At ITEM LEVEL – In column “Ma” put the tick
If the invoice is blocked at Header level, the blocking is for total items in the invoice
If the block is at item level, it is applicable for only that item
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If the manual blocking is at Header level, the reason of the invoice blocking will appear as “A” in MM and FI document after posting the invoice
If the blocking is at Item level OR automatic blocking by the system on any reason, the reason of blocking will appear as “R” and will appear only in FI document
INVOICE REDUCTION
It is an option available at MIRO to reduce the invoice and accept it.
For example,At PO – 100Nos x Price 10 (1000)At GR – 70Nos x Price 10 (700)At IV – 100Nos x Price 10 (1000) and if we are opting Invoice reduction,System will generate 2 accounting documents
1. 100Nos x Price 10 – Invoice (as per the invoice)2. 30Nos x Price 10 – A CREDIT MEMO (for the difference value)
The invoice reduction option is available at Display variant option in MIRO screen
The payment to Vendor will be the difference of Invoice and the credit memo created
While posting the invoice, system will issue a message and the same can be used to generate a letter of complaint to the Vendor
Procedure of Invoice reduction- Select the option “Invoice reduction” in MIRO screen- The fields in Item detail
- In “Correction ID” column, select the reason for invoice reduction like Vendor error/ reduce invoice, etc.- In Invoice quantity at Item detail, enter the Invoice quantity as per the Vendor.- In Invoice amount at Item level, enter the value as per the Vendor- In Header, in amount filed, enter the amount to be paid to the vendor after reducing.
In simulation, we can see the credit memo detail and Vendor payment detail (reduced amount)
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Account Movements
Purchase Order - 100Nos x Price 10Goods Receipt - 70 NosInvoice receipt - 100Nos x Price 12 + 10% Tax = 1200 + 120 =1320
At Goods Receipt At Invoice Verification Credit memoStock Account +700 +140 GR/IR clearing Account -700 +700 Vendor Account -1320 +396Input Tax +120 -36Clearing account for Invoice reduction +360 -360
At Invoice verification,Vendor account – 1320, GR/IR clearing – 700, the difference = 1320-700 =620Out of 620,
Clearing account = 30Nos x 12 = 360Input tax = 10% of 1200 = 120So the amount will go to stock account = 620 – (360+120) = 140
As the invoice is accepted, the GR/IR clearing account will be cleared and the balance amount (140) will go to Stock account
After posting the invoice reduction, we CAN NOT see the higher amount invoiced by the Vendor in PO History. It will show the actual amount paid to the Vendor after the invoice reduction
2 accounting documents are generated One for Invoice and the other for Credit memo
VARIANCE WITHOUT REFERENCE TO AN ITEM
The options are1. Total based Invoice reduction2. Total based acceptance3. Vendor specific tolerances
1. TOTAL BASED INVOICE REDUCTION
In this type of invoice verification, 2 accounting documents are generated1. Suggested Quantity and Value2. Credit memo for difference quantity and Value (Offsetting entry)
It is not reducing the invoice, but posting a credit memo for the difference
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In customizing, we can allocate each Vendor to a tolerance group of LIV. For each tolerance group, set the limits up to which invoices can be automatically reduced without reference to a particular item. All these settings are at company code level.(Vendor specific tolerance –Automatic invoice reduction – case 3 explained earlier)
2. TOTAL BASED ACCEPTANCE
In this case, system accept a difference (positive or Negative) between the item total it expects and it posts the difference to a ”Non operating expense or revenue” account.
In customizing, we can set this tolerance limits at Company code level.(Vendor specific tolerance limits – Automatic acceptance of Negative differences, Automatic acceptance of Positive differences- explained in case 1 & 2 explained earlier)
3. VENDOR SPECIFIC TOLERANCE LIMITS
EXPECTED INVOICE VALUE
SETTINGS FOR SMALL DIFFERENCES
INVOICE INVOICECANNOT BE CANNOT BEPOSTED POSTED
SETTING FOR SETTING FOR NEGATIVE POSITIVE TOLERANCE TOLERANCES
( - ) ( + )
-
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SETTING FOR INVOICE REDUCTION
MANUAL ACCEPTANCE
We can accept the differences manually only, if the invoice is verified in the background and containing errors
Accept the difference on header data and reprocess the invoice While posting these invoices system will post the difference amount to the same
account.
INVOICE VERIFICATION OF CONSUMPTION MATERIALS
These invoices will not have any GR/IR clearing account as there is not any GR
INVOICES of PO WITH ACCOUNT ASSIGNMENTThe topics are
1. Enter invoice for Pos with account assignment2. Posting Logic for invoices for Pos with Account assignment3. Invoice posting for Blanket Pos
1. Invoices for Pos with Account Assignment While posting the invoice, system proposes the individual current account
assignment as per the PO In case of multiple account assignment, and partial invoice, the system will
distribute- on a progressive fill-up basis- Proportionately
Account assignment categories are – Asset (A), Cost Centre (K), Sales Order (C), Order (F), etc.
Account assignment category is fixed in PO per item which is having the control of a) you can post a GR b) you can post an invoice. The controls are fixed in Customizing
The account assignment fixed in PO can be changed in cases (a) Defined (changes) in customizing (b) Non-valuated GRs are defined in PO
The account assignment categories are available in SPRO at Purchasing > Account assignment > Maintain account assignment category
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The detailed settings for each account assignment categories arei. Changeability of account assignment
ii. IR changeableiii. Define account assignmentiv. Delivery cost separatev. Goods receipt
vi. GR non-valuatedvii. Invoice receipt
viii. GR indicator bidingix. GR non-valuated bidingx. IR indicator biding
Account movements for Pos with account assignmentPO - 100Nos x Price 10GR - 50NosIR - 50Nos x Price 11
CASE -1 - VALUATED GR At GR At IVConsumption Account +500 +50GR/IR clearing Account -500 +500Vendor Account -550
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CASE -2 - NON-VALUATED GR At GR At IVConsumption Account +550GR/IR clearing Account Vendor Account -550
If the valuated GR defined in PO, the price difference is posted to the Consumption account
INVOICE VERIFICATION OF BLANKET PURCHASE ORDERS
It will directly post the invoice for the material / service System will check the Value & Quantity along with the Validity period at the time
of Invoice verification If it crosses the limits, system will block the invoice We can enter an invoice for Blanket PO with many account assignments and
relevant amounts
DELIVRY COSTS
Planned and unplanned delivery costs Planned delivery costs are entered at item level of the PO Unplanned delivery costs are entered during Invoice verification
o Planned delivery Costs
Freight Customs
Fixed amount % of ValueQuantity dependent
In account movements, Freight clearing account and Customs clearing account at GR. At Invoice verification, these clearing accounts are cleared
If there is any difference in these planned delivery costs at Invoice verification, system will treat it as a normal price/ quantity variance and postings will be accordingly.
Unplanned delivery costs
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As per the settings in Customizing, the unplanned delivery costs can be (1) Distributed to invoice items (2) Posting to a separate G/L account
If it is distributed to items, it WILL NOT list them separately in PO History, will be included in the invoice amount
If it is posted to a separate G/L account, they also WILL NOT appear in PO History
Unplanned delivery costs are posted to item in PROPORTION to the total value in the current invoice
We can post an invoice of unplanned delivery costs alone for an invoice already posted. It will be treated as a Debit memo.
If the unplanned delivery costs are distributed among PO items, the offsetting entry (in case of Price difference) is post to the respective stock account or a price difference account as per the price control for that material
The setting made at customizing for unplanned delivery costs are at COMPANY CODE level
We CAN NOT have an unplanned delivery cost option for a Planned delivery cost with distribute the value among the items in MIRO transaction.
To tackle the situation of unplanned delivery cost of a planned delivery cost in MIRO, got to the item level populated value, edit there itself and put the total at header level. Another option is to activate direct posating to G/L accounts. So it is suggested to enter the planned delivery cost accurately to the extent possible way.
SUBSEQUENT DEBITS/ CREDITS
This option is used for the changes due to TOTAL invoice value (NOT QUANTITY)
These postings are done AFTER a posting of an invoice When you enter to subsequent debit/ credit system suggests full quantity, but
NO value Subsequent debit/ Credits are flagged in PO History Account movements in subsequent credit/ debit are stock account and Vendor
account Case1 – If GR is posted
System makes the offsetting entry to stock account or price difference account depending on the price control of the material and the stock position
Case 2 – If GR is NOT postedSystem posts the offsetting entry to GR/IR clearing account. When the GR is posted and this GR/IR clearing account will be cleared and posted to stock or Price difference account as per the price control of the material and stock position
In subsequent debit/ credit, there is no material movemento We can enter a subsequent debit/ credit memo for a PO item only if an invoice
has been already posted
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CREDIT MEMO/ REVERSALS
Credit Memo – received from Vendor if we are overcharged It can be entered with respect to a PO It should be posted as subsequent Credit/ debit The value only will change/ reduce Account movements are SAME as that of an invoice (+) and (-) signs are available for posting the value
Reversing Invoice – Transaction code – MR8M When you reverse an invoice, all the items in the invoice document will be reversed We can reverse a PART of an invoice ONLY by entering a CREDIT MEMO
manually. When we reverse a Credit memo, system creates an Invoice We CAN NOT reverse a reversed document
Calculation of GR/IR account
=Quantity X ( Clearing Value (Total) - GR Value (1st)) (Invoice quantity - GR Quantity)
INVOICE VERIFICATION IN BACKGROUND – Transaction code – MIRA
Used for larger invoice with hundreds of line items Enter the general data like Gross value, Taxes, Payment terms, etc DO NOT enter item-wise details. Save in an invoice document (without any item) By the settlement program (RMBABG00) by system administrator in the
background, creates the items for this invoice document. Based on quantity and value, R/3 system checks(if the total of the items and amounts already saved results in a ZERO balance) and system posts the invoice.
Main Disadvantage is we can have cases of price differences cancel each other without being noticed
If the invoice is processed in background and given status as “errors” are to be cleared manually only
The invoices processed by MIRA will appear in parked invoice till the settlement program runs
GRs are settled directly without the vendor invoice The system uses the information of PO and GR ERS to be defined in Material Master Vendor Master data and Info record should have the selection of ERS GR based IV should be there in PO We CANNOT use ERS for settling Delivery costs Tax code should be SAME in PO and info record Customizing setting for ERS for the company code mandatory
INVOICING PLAN2 types of Invoicing plans are used
1. Periodic2. Partial
1. PERIODIC INVOICING PLAN Generally used for automatic settlement of invoices which is periodic in nature Recurrent procurement transactions Examples are Rentals, lease amounts which are fixed in nature TOTAL VALUE of the PO item is invoiced on EACH due date. These due dates
can be suggested by R/3 system as per your plan Invoicing plan types are defined in customizing and is assigned to the PO item,
while creating a PO Vendor should have the ERS tick if you want to work with ERS
2. PARTIAL INVOICING PALN Invoicing in different stages Example is % invoicing in a construction project In this type the total value of the item is SPREAD among the individual due dates
as per the invoicing Plan ONLY a PART of the total item is due on a payable date The total value of the total items is SPLIT on the dates and the values are specified
in Invoicing Plan
PRE-REQUISITES for INVOICING PLANS1. Account assignment for the item2. No GR or Non-valuated GR3. Document type – FO for the Purchase Order4. Validity period should be entered in PO5. Invoicing Plan settings are to be defined in customizing6. For ERS, settings of ERS
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CUSTOMIZING FOR INVOICING PLANS1. Invoicing Plan type for Periodic and Partial2. Maintain Date IDs3. Define and maintain Date category4. Maintain date proposal for the Invoicing Plan type5. Define rules for Date determination6. Define Invoice blocks
Periodic Partial1. Validity period 1. Starting date2. Periodicity of Invoicing date 2. Reference invoicing Plan number3. Maintenance 3. Maintenance
RELEASE OF BLOCKED INVOICES – Transaction Code – MRBR
Invoices can be released manual and automatic While releasing a blocked invoice, we can change the baseline date for the payment Basic invoice blocking reasons are Q- Quantity, D- date, P- Price, T – Quality Automatic release of blocked invoice done in background by running the program
RM08RELEASE Procedure of manual release
1. Select that particular invoice in MRBR transaction2. Keep the cursor on the reason (X) and click on the flag icon for
deleing that particular blocking reason. Then it will change to green in color
3. Click on ‘Save change” icon. The invoice blocking is removed. The particular invoice will disappear from the list
GR/IR ACCOUNT MAINTENANCE
The GR/IR clearing account is cleared only if the invoiced quantity and delivered quantity are equal.If it is NOT equal the system expects invoice/ material. And if the material is not coming, we have to clear this account manually.List of GR/IR balances are available in transaction code – MB5S
GENERAL CUSTOMIZING SETTINGS OF INVOICE VERIFICATION
1. MessagesPath – LIV > Define attributes of system messagesWarning & error messagesUser defined messages
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2. Automatic PostingsOBYC transaction and Group – RMK for MM accounts
3. Document type & Number ranges Path – LIV > Incoming Invoice > Number assignment
There are 2 types of transactions1. Manual Invoice entry – RD2. Automatic by ERS/ EDI/ reversal – RS
Number ranges are defined per document type and for a fiscal year
4. Taxes & Currencies Path – Fin. Accounting > FA Global setting > Taxes in sale & Purchase > Basic settings
1. Tax code – For each company code2. Set unplanned delivery cost distribution3. Set postings of exchange rate differences
5. PO Text types – general messages
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6. ITEM LIST VARIANTS
7. Duplicate Invoice checkIf we have selected duplicate invoice check in Vendor master record and while entering the invoice, there is an entry in the field ‘REFERENCE”, by which R/3 system always checks for an invoice entry already made for this vendor with same data. The data checked by the system are :
1. Company Code2. Vendor3. reference4. Document date5. Amount and currency
In customizing, we can decide if the system has to take care of Company code/ the reference and dates as check criteria
8. Invoice Blocks9. Message determination in LIV (standard condition technique)
15 GENERAL INFORMATIONS on LIV Most of the data related to LIV are stored in Tables – EKBE, RBKP & RSEG Data for LIV are
1. Master data – Material master, Vendor Master & Accounting data of G/l Account
2. Transactional data – Purchasing documents, Material document & Accounting documents
If you post an invoice without checking the invoice items, variances in individual documents can cancel each other without your notice
Invoice can be posted directly to a G/L account OR material account by activating direct posting to G/l account and Material account in Customizing
If Vendor is NOT CREATED, system will post the amount to ONE TIME VENDOR Account
Automatic settlements facility is available for1. Consignment & Pipeline2. ERS3. Invoicing Plan4. Revaluation
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ALLOCATION FEATURE in Invoice verification (MIRO)ALLOCATION TO MORE CRITERIA TYPE OF INVOICE ITEMS
1Purchase Order/ Sch. Agreement 1Multiple allocation 1Goods & Services Only
2Planned Delivery costs only
3Goods &services + Planned delivery costs
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2Delivery Note (GR based IV) 1Multiple allocation 1Goods & Services Only
2Selection Vendor 3Bill of Lading 1Multiple allocation 1Planned Delivery costs only
2Selection Vendor
4Service Entry Sheet (SES) 1Multiple allocation 1Services Only
5Vendor 1Plants 1Goods & Services Only 2Deliveries 2Planned Delivery costs only
4Time Periods 6Transport Agent 1means of transport 1Services Only
2Partner 3Freight Cost number
-
Invoice verification of ONE time Vendor – Same as that of LIV but, the system proposes the address data for the invoicing party and OTV button for Vendor data screen area. Collective accounts are set up for One time vendors. These accounts are used for more than 1 vendor so the master record does not contain any vendor specific data. SO the details are to be entered in Purchasing OR Invoice verification.
The procedure of Invoice verification of ONE TIME Vendor is 1. In the Vendor data of MIRO screen, choose OTV (One Time
Vendor) and enter address, Bank data, etc.2. Enter the relevant invoice data3. Post the invoice
If you are having 2 types of operations – Domestic and Foreign, you have to have 2 one time vendor master record
While posting an invoice verification of FREE GOODS, (511) Qty, MAP, total value will be changed/ updated in material master
If there is different payee, the option to enter this are (1) At the time of Invoice verification (2) AT the time of Payment program run
Work List is used in the application of (1) enter invoice (2) Park the invoice GR based IV can be used for invoice against PO and invoice against Delivery note Automatic amount correction –
When quantity changes occur, you can perform automatic correction of an ITEM AMOUNT using the USER PARAMETER –RBB. For enter invoice and park invoice set the user profile RBB in SAP easy menu in Parameter tab and in value column put 12 Blanks and ‘X’ for the 13th and then save.In easy Menu – Go to SYSTEM > Maintain User Profile, > Set Data, will get parameter Tab
Invoice reduction – Correcting quantities or Values
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Tax – We can configure whether we want to take into account tax postings (a) Only in Invoice document (b) Invoice document + Credit memo
While SIMULATING, following POSTING LINES are NOT DISAPLYED because they are NOT determined while simulating the document
1. Posting for withholding Tax2. Multiple Vendor line items due to SPLIT TERMS of Payment3. Multiple documents due to cross-company code postings
In simulation we can switchover currencies, if there are more than one currency involved
Duplicate Invoice Check System checks only FI document created in LIV. ONLY for INVOICESIt will NOT check the Credit memos/ Subsequent Credit or debitChecking will be done in FI document for – Company code, Vendor, Currency, Document date & reference document numberDuplicate invoice check can be fixed for
1. Reference document number2. Company code3. Invoice document date – It will check here for
i. Invoice dateii. Gross amountiii. Currencyiv. Vendor
You CAN NOT REDUCE the invoice while in PARKING Invoice verification in background is used for
1. Invoice with mass amount of data for which ITEM CHECK is NOT mandatory
2. Invoicing referring to transactions NOT YET ENTEREDProgram – RMBABG00
ACCOUNT DETERMINATION in LIV DEPENDS ON 1. Information from entries
a) Vendor accountb) Amount
2. Material Master recorda) Valuation classb) Price controlc) Material accountd) Stock details
3. Posted Documenta) Purchase Order Priceb) GR is posted or not
4. System settingsa) Gross/ Net postingb) G/L account details
If One invoice refers MORE THAN 1 PO, then the system suggests the TERMS of PAYMENT of the FIRST PO
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If Quality management is active, SAP recommends GR based Invoice verification Invoice blocks indicators
1. Q – Quantity Variance2. P - Price variance3. D – Scheduled date4. G – Order price quantity variance5. I – Quality6. O – Others (item amount check)
If an invoice for a Blanket PO is blocked due to DATE variance CANNOT be released automatically.
If an invoice is blocked (a) Blocking manually at header AND (b) item having block due to variances, the system will display this invoice block as –DUE to VARIANCES
Planned delivery costs are on ITEM basis We CAN NOT differentiate between UNPLANNED DISTRIBUTED DELIVERY
COSTS and PRICE VARIANCES at PO HistoryEven system will not display the unplanned delivery cost that posted to a separate G/l account in PO History
System WILL NOT CHECK the maximum amount of the prices for unplanned delivery cost
Subsequent Debit/ Credit System records every subsequent credit/ debit in PO historySubsequent credit/ debit are VALUE basis
Total based Differences – Vendor specific tolerances 1. Total based invoice reductionPosting to Invoice reduction clearing account2. total based acceptancePosting the difference to Expense/ revenue account3. Manual acceptanceas per customizing
Credit memos can be created using ERS Planned delivery costs CANNOT be processed with ERS Program used for ERS – RMMR1MRS Revaluation – To determine the difference values on the basis of price changes that
retro-actively valid and to create settlement documents for themPre-requisites
1. It should be with respect to a PO/ Sch. Agreement item2. The item should not be deleted or blocked3. GR based IV4. Flagging for revaluation in Vendor Master5. Customization
PO History – History category of revaluation – NeuB CHECKS before posting of a CREDIT MEMO
1. Maximum Value – It should be less than earlier invoice value2. Maximum Quantity - It should be less than earlier invoice Quantity
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3. EQUAL – It will leads to a FULL REVERSAL (It will not create credit memo)
Advance payments / Down payments (F-58) are NOT updated in PO History If an item out many item in an invoice is cleared for payment and other items are in
blocked for other reasons, the ITEM-WISE RELEASE is NOT possible Automatic Payment Program (APP)
While maintaining a Purchasing document, R/3 system checks for if it should generate an output for the document. This output format represents a message.
A message is an information that is output using various media – Printer, EDI, Fax, etc.
R/3 system output depends on the message concerned. R/3 system can output messages via various media. This is defined in THE DOCUMENT or Automatically Via MESSAGE DTERMINATION
R/3 system places the document to be printed in a queue and it is released from here as required for output via EDI, etc. You can release these messages manually or auto by the system
A. MESSAGE OUTPUT WITHOUT MESSAGE DETERMINATION The system can output the message types already defined in the standard system
(Such as NEU for PO) The system generates messages using standard parameters only (Such as Output
medium – Print, Time 1, immediate output, etc.). You can change the proposed values.
System determines the printer in following sequence1. Printer defined in Purchasing group2. Printer defined in USER PARAMETER –PR1
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3. Printer defined in user defaults We can define the message determination for each purchasing transaction We can change the proposed standard parameters in individual documents NO MESSAGE SCHMA assigned in this case
B. MESSAGE OUTPUT WITH MESSAGE DETERMINATION Any message type can be outputted System can suggest the output medium and time depending on the specific values of
the influencing factors (Such as document type, Vendor, etc.) The system determines the printer in following sequence
1. Printer defined in the MESSAGE RECORD2. Printer defined in the PURCHASING GROUP.
The aim of Message determination is to manage message according to a pre-defined criteria, MESSAGE SCHEMA.
During message determination, R/3 system checks if there is any condition records created for that application in customizing. If it finds it, it will process it (1 or more messages also)
During message determination, system searches for condition records according to a pre-defined hierarchy (Access Sequence)
Message determination enables you to CONTROL (document output for each Vendor) individually.
You can define a SCHEMA that controls the message determination separately for each purchasing transaction.
For each message type you can specify that the R/3 system is to optically archive the document when it is output.
If you use message determination to output purchasing documents via a printer, the R/3 system determines the printer name neither from the user parameter PR1 nor from the user defaults
Message determination function in purchasing enables R/3 system to determine the message allowed for a purchasing transaction and suggests suitable messages
Message determination is activated automatically in standard SAP R/3 system (000) when you install the client
You will define the combination of fields for which you want to create message records in CONDITION TABLE.
Access sequence is a strategy that R/3 system uses to search for valid message records
Message types represents different messages in the system (For PO/ for PR, etc) You can define message types ALLOWED for each message application in a
message schema. You can assign separate message schemas to the individual purchasing document
categories Maintain Message types
1. Indicator for condition access and possibly access sequence for automatic message determination
2. Partner roles for different recipient (Ordering address, etc)
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3. Processing program and form (It is as per the output medium and requirement of client)
4. Main title and mail text for internal use, if required
Fine tune control Define which print operation this message type is defined for (Like New print/ Print for changes, etc)
Maintain Message schema Enter message type schema. This defines for which purchasing document and under which conditions the system should generate a message
Standard message types are supplied for each purchasing document We can define further message types for each purchasing document type separately You MUST create message records (condition records) for individual message
types that you want to use Influencing factors for Message determination are;
You can define other criteria also for message determination in Customizing. While creating condition tables, select these influencing factors (stated 1,2,3 above) from a field catalogue.
CONDITION TABLE & ACCESS SEQUENCE We can use various key combinations to create a condition table. In access sequence, you define the condition tables that R/3 system to check in a proper Order/ sequence
CONDITION TABLE
Pur. Org Vendor Message recordXXXX VVVVV time -4PM
Medium - FAX No of copies - 4
ACCESS SEQUENCESequence No Condition Table
10 Pur. Orgn/ Vendor
20
Document type
CONDITION TABLEDocument type Message record
NB Time - Immediate Medium - Print No. of copies - 2
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Depending on purchase document type, R/3 system determines if the message determination is active and the Schema in message determination controls the message determination
It check all the message types entered for the schema determined and the requirements assigned to those message types
If the assigned requirements is met for an (auto) message type, the program determines the access sequence with which it should search through the condition tables for message records
We can check the message determination facility using the determination analysis
Printer determination in PURCHASING
Enter a purchasing transaction (eg. Create a PO)
Print parameter corresponds toPurchase group criteria
Pre-defined message type (eg. NEU)
Record exists for this message type Message contains output deviceof purchasing group
Record contains NO output device
Record contains output device
Determination of Form depending onApplication/ Message type/Transmission medium
ACCESS SEQUENCE1. Doc Type/ Pur Orgn./ Vendor2. Document type
RECORDS OF MESSAGE TYPES MESSAGE HEADER 1. NO valid record exists Message Type Printer 2. Valid Record exists NEU 1DRUCKLF 123
PRINTER
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1
2
3 4
5
1. Output immediately2. Number of copies -2
CUSTOMIZING of MESSAGES in PURCHASING
1. Texts for messages. – We can maintain any text if required. Separate options for a. Document headerb. Document Itemc. Document Supplementd. Change Textse. Headings
2. Forms (Layout sets) for MessagesAdjust forms separately for 1. Purchase Organization2. RFQ3. Purchase Order4. Contract5. Scheduling Agreement Delivery schedule
3. EDI1. Set-up partner profiles
1. Bank – B2. Benefits Provider – BP3. Customer – KU4. Vendor – LI5. Logical system – LS6. Partner type –US
Variants available for selection of condition tables are:1. Company Code2. Purchase Organization3. Inter company4. Ordering address5. Purchase document type6. Purchase group7. Supplying Plant8. Vendor2) Access Sequence – it is CROSS CLIENTDefine access sequence for RFQ/ PO/ Outline Agreement/ Sch Agreement release Order/ Inbound delivery0001 - Document type/ Purchase Organization/ Vendor (025)Access for inbound delivery should be delivery type3) Message (Output Type) TypeDefine message types for RFQ/ PO/ Outline Agreement/ Sch Agreement release Order/ Inbound delivery.Standard message types are
1. NEU – New PO printout2. AUFB – Dunning Order confirmation3. ERIN – reminder4. MAHN – Dunning
For each message (output type) type,Processing routines like
a. Printb. Faxc. EDId. ALE are to be fixed
For each processing routines, the partner functions likea. Ordering addressb. Vendorc. Delivering Plant, etc are to be assigned
4) Requirement of Output control Keep the tick for make it active
5) Message determination SchemaSchema (Procedure) to be attached for each ofRFQ/ PO/ Outline Agreement/ Sch Agreement release Order/ Inbound delivery
6) Partner roles per message typeDefine partner role for RFQ/ PO/ Outline Agreement/ Sch Agreement release Order/ Inbound delivery
5) Assign output device to Purchasing groupAttach printer/ output device to each purchasing group
6) Field relevant Purchasing document changes
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Detailed selection of filed names in the documents
16 RELEASE PROCEDUREKey terms in release procedure
1. Release strategy – It controls entire release procedure/ approval process. It contains release conditions, release codes and release pre-requisites
2. Release Condition – It determines which release strategy applies for a situation3. Release Codes – Represents an individual/ Deptt. That must give their approval. It’s
a 2 character key. These release code should be attached to a release object (‘2’ for Purchasing documents)
4. Release pre -requisites – It will tell the system the order in which approval process will take place.
5. Release Status/ Indicator – The code represents the release status of a document
Release procedure can be WITH and WITHOUT Classification ONLY PURCHASE REQUISITION is having the facility of release procedure WITH
and WITHOUT classification. All other can have ONLY WITH CLASSIFICATION Release can be applied to TOTAL items (HEADER LEVEL)and also can be by
ITEM-by-ITEM (ITEM LEVEL). It is determined by the DOCUMENT TYPE Purchase requisition is the ONLY purchasing document that having the facility of
ITEM LEVEL release strategy. All others are at HEADER LEVEL only We can cancel a previously affected release and reset the former release status. A Release strategy can include up to EIGHT Release points A release condition must be defined as classification characteristic (Eg. Plant/ Gross
Amount). The part of the characteristic definition is a link to a FIELD of the COMMUNICATION STRUCTURE (CEBAN – for PR or CEKKO – for external purchasing documents). The classification characteristic should have the attribute “Multiple Value” so that you can not only maintain the characteristic value but can enter several values, if necessary
Group together all characteristic that we wish to use in release strategy for PRs or external purchasing documents in a class. The class must be assigned to class type ‘032’. This release class is assigned to the release object in customizing
Pre-requisites for release strategy customizing 1. Release class type ‘032’2. Release characteristics (WERKS –Plant, GNETW – Net PO value, etc)
Process flow of Release Strategy 1. Create/ Edit characteristicsCreate characteristics for the release strategy control objects like Plant/ Total PO Value/ Invoice value, etc. Table –EBAN for PR & CEKKO for purchasing documents
2. Create/ Edit class
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Name a class, create it in class type ‘032’In basic data tab, you can enter the validity of this class.In characteristics tab, enter the characteristics created in step 1 along with Data type, Number of character, decimal points, unit of measurement, etc.
3. Set-up Procedure with classification (Do it in a sequence)1. Create release group/ CodeIt’s a 2 digit key and is to be assigned to a release object‘2’.Provide the overall release tickEnter the class created in step2
2. Release codesIn each group/ code, enter the release codes. Workflow is also can be attached here
3. Release IndicatorDefine the release indicator here, like released, under process, blockedChangeability options are available hereYou can assign the % value change against each release indicatorChangeability Indicators available in standard system are:
1. BLANK – Changeable, new release in case of new strategy2. 1 – Cannot be changed3. 2 – Changeable, No new determination of strategy4. 3 – Changeable, New release in case of new strategy5. 4 – Changeable, new release in case of new strategy OR value change
4. Release strategyDifferent strategies are to be created for each release groups/ Codes
1. Release pre-requisite – Select the appropriate check boxes for each strategy
2. Release statuses – Attach the release indicator for each step in each strategy
3. Classification – Enter the specific values for the characteristics created ion step1 for each strategy
4. Release Simulation – Simulate and see for errors by the system
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17 BATCH MANAGEMENT
Batch Management can be with Classification and without classification Batch Management via classification is used in Procurement, Production and SD We can search for batches via batch determination function, if the batches are
classified.
Material Master record and Batch Master record : In Material Master, select Batch Management indicator in any of Purchasing view/
Sales view/ Work Scheduling view / General Plant data view/ Storage 1 view/ Warehouse Management view
For Batch Master Creation function . CS01. Options are creation of batch master record manually or creation of batch during
goods receipt.
Batch number can have any alphanumeric
The numbering can be Internal / External. If the batch number is internal, system will create batches for goods movement and batch master will be created in the background.
If we are changing a material without batch to with batch, we have to post all the stocks from the previous year, the current period and previous period.
While canceling the batch requirement, we have to re-organize the batch master records. Then reset the batch management indicator(edit the master record), post the stock back
There are specific function modules for batches. If we are running it, batches will be created automatically. Auto Batch – EXIT – SAPLV01Z-001 & 002
Batch can be set to CLIENT / PLANT / MATERIAL Level.
If batches are set at PLANT / MATERIAL level :1. Batch number can be reassigned with a different specification for a material in each Plant.
2. We can transfer the stock from one Plant to another Plant even if the batches do not have the same specification. The batch quantity transferred assumes the specification of the destination batch.
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3. If you want the batch specification to be unique across the Plants, you can do so organizationally. The system does not support.
If the Batches are set at MATERIAL LEVEL ,1. A batch has the same specification for all Plants in which material is held.
2. The same batch number can be re-assigned with a different specification for each material.
If the batches are maintained at CLIENT & MATERIAL Level ,1. Same batch number can be assigned only once in the client
2. It will be uniquely assigned to one material
Batch related customizations are:Area of Validity of Batches – PLANT or MATERIAL or CLIENT
Standard R/3 system default setting for batch is PLANTSwitching over to higher level ( Material to Plant or Plant or Client ) is ALWAYS allowed. But to lower levels allowed only for Client to Material
Batch Status is a central tool for identifying the use of the batch as Restricted or Unrestricted.
We can change the batch status in the batch master record. But this results in an automatic transfer posting of the individual stocks
18 CLASSIFICATIONThe purpose of classification is to find out suitable/ similar objects available in the R/3 system (Master records)
Elements of Classification
Meaning ExampleOBJECT TYPE - Inferred from a classifiable Table - MARA
OBJECT - Classifiable Unit - Material/ Vendor
CLASS TYPE - Top level unit of control of classes - Material/ Document
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CLASS - Grouping of similar objects - Monitor/ Printer
CHARACTERISTIC- Properties of the object - Size/ Weight
VALUE - Value of characteristic - 17inch / 10Kg
Procedure from Value to Class type involves in classification Formats of characteristic Values
1. NUM – Numeric – Negative values also allowed2. CHAR – Alphanumeric, But case sensitive3. DATE – Date4. TIME – Time5. CURR - Currency
Selection of multiple values are also possible We can give allowed values, Ranges, intervals, etc. Equal to (=), Greater than (<), Less than (>) functions are also possible We CANNOT CHANGE the CLASS TYPE once you have created a class In ONE CLSS TYPE, AN OBJECT can have ONLY ONE value for any
CHARACTERISTIC Classification is the assignment + Value assignment Classification means assign object to classes and use the characteristic Value of the
class to describe an object 2 types of assignment function
1. 1 Object to many classes2. 1 Class to many objects
=,<,> functions are possible to finding out an object
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19 PRICING PROCEDURE
Time dependent conditions
We can specify in customizing via Document type whether time dependent (TD) or Time Independent (TID) conditions can be maintained for Outline Agreements
Conditions in Purchase Order are Time independent TD conditions can be maintained for
1. Plant specific2. Purchase Organization specific3. Reference Purchase Organization specific4. Info Record5. Outline agreements6. General conditions
TD conditions can be limited to a VALIDITY PERIOD Price/ quantity scaling We can specify the limits for TD conditions TD conditions from info record or Outline agreements are accepted as default
values in Pos
Maintaining TD Conditions
Conditions can be maintained using master data menu in purchasing. But SAP does not recommend it. But maintain them in the relevant documents or in the info records
1. Using Master data menu for maintaining TD conditionsa) Master data > Conditions > Pricesb) Master data > Conditions > Discounts/ surcharges
- per Vendor- per Condition group- per material type- per invoicing party
c) Master data > Conditions > OtherCondition types – GAU2, NAVS and you can create your own here
No Access sequences for supplementary conditions. Eg. Material specific discounts & surcharges
No Separate price determination for PB00. They are found using condition record for the gross price. PB00 is NOT having any access sequence
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CONDITION TYPES.
Each condition type is defined with1. Condition class2. Calculation Type3. Condition category4. Access sequence
Individual conditions are described by condition typesExamples like Gross Price, Freight, etc
Condition types are defined together with their CONTROL PARAMETERS in customizing.
Condition types are differentiated broadly by their Condition class and finely by Condition Category
Condition type stipulates how the R/3 system calculate the condition value ‘+’ or ‘-‘ sign determination whether a condition is treated as + or – -ve amounts are Discounts +ve amounts are Surcharges Scale basis foe scales depend on condition type. Scale can be on quantity or value Access Sequence is assigned to a condition type (Not mandatory) Access sequence is a search strategy that enables you to specify the order in which
condition tables are to be searched for relevant entries for a condition type In standard SAP R/3 system
No access sequence is attached for Discounts and surcharges (RA00, RA01..) because they DO NOT HAVE ANY SEPARTE VALIDITY PERIODS.They are maintained at the same time as the Gross Price (PB00) and their validity period is always the same as the validity period of Gross Price
Some of the condition types and its control parameters are;Goss Price – PB00 Condition Class – PricesCalculation type – Quantity dependentCondition Category – Basic PriceAccess Sequence – Gross Price
Freight – FRB1 Condition Class – Discount / SurchargesCalculation type – Fixed amountCondition Category – Delivery CostsAccess Sequence – Not applicable
CASH DICOUNT - SKTOCondition Class – Discount/ SurchargesCalculation type – %Condition Category – Cash DiscountAccess Sequence – Not applicable
The CONTROL FUNCTIONS of condition types are
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1. Condition Class (Price or Discount, etc. )2. Condition Type ( Quantity or Value or % or fixed, etc. )3. Condition Category (Gross or delivery cost, Etc)4. Access Sequence (Gross Price, etc)
CUSTOMIZING CONDITION TYPES Condition types defines the properties and characteristics of a Pricing elementCondition types are defined in customizingWe should not change the standard condition type available in the standard systemIf a new condition type with a validity period is created, it must have an access sequence assigned to it
A condition class and a calculation type must be assigned to a Condition type along with a Condition category
Condition types can be defined as a HEADER CONDITION or ITEM CONDITION or GROUP CONDITION
Condition amounts/ Values CAN be changed or deleted by change option by manual entry
A CALCULATION SCHEMS (PRICING PROCEDURE) for supplementary conditions must be assigned to the Condition type for the Gross Price
Scaling facility and upper & Lower limits are available for condition types Options in Condition type (General)
1. CONTROL DATA 2. GROUP CONDITION1Condition Class
A Discount/ Surcharge 1Group conditionB Prices 2Group condition routineC Expenses 3Rounding difference comparisonD TaxesE Extra Pay
2Calculation Type 3. CHANGES WHICH CAN BE MADEA PercentageB Fixed amount 1Manual Entries - No LimitationC Quantity A FreeD Gross Weight B Auto entry priorityE Net weight C Manual entry priorityF Volume D No manual entry priority
A Condition to be duplicatedB Cumulation of condition
6+' or '-' sign
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ACCESS SEQUENCE
It’s a search strategy that enables you to specify the order in which Condition tables are to be searched for relevant entries for a condition type.
It is assigned to a condition type The order of access is determined by the order of the condition table in the access
sequence. The EXLUSIVE INDICATOR determines that the search for further entries in
condition tables is interrupted if an access was successful and a relevant entry was found
Condition types WITH VALIDITY period SHOULD HAVE an access sequence We CAN NOT assign an access sequence to a HEADER CONDITION
EXCLUSION OF CONDITIONS
Define Condition ExclusionIn this step, you define the condition exclusion process.If several condition records are valid in the price determination process, you must define rules stipulating which conditions are selected and which are disregarded. To do this, use the condition exclusion mechanism.The exclusion of condition records is controlled via exclusion groups. An exclusion group is a list of condition types that are compared with each other during the price determination process. The result may be the exclusion of a whole group of conditions or the exclusion of individual conditions within a group.The result of the price determination process can thus be influenced with regard to a desired criterion (for example, the lowest price) by the exclusion of certain condition types, whereas others are taken into account in this process.
You can define a condition exclusion process that determines the most favorable price and excludes less favorable but fundamentally possible pricing results. The lowest price then overrides the condition type priorities that would have been dictated by the access sequence.
In the calculation schema you define the procedure by which selection within or between the condition exclusion groups takes place. The following possibilities are available:
Selection of the most favorable condition type within a condition exclusion group.
Selection of the most favorable condition record of a condition type if more valid condition records exist (for example, selection from different condition records of condition type PR00)
Selection of the most favorable of two condition exclusion groups (in this case, all condition types of the two groups are cumulated and the totals compared with each other)
The tables for the exclusion of conditions are supplied empty. You must therefore work through the following points if you wish to use the condition exclusion facility:
Define condition exclusion groups
Assign condition types to condition exclusion groups
Enter condition exclusion groups in the calculation schema and define a procedure for the determination of the condition types to be excluded.
Activities1. Create a condition exclusion group by entering an alphanumeric key that is max. four characters long, together with a description.2. Assign the condition types to a condition exclusion group. A condition exclusion group can contain any number of condition types.3. Enter the condition exclusion group in the calculation schema that you will be using for price (or cost) determination purposes.4. In the process, note the sequence (consecutive numbers) in which the exclusion groups are to be processed.You can use two exclusion groups for condition exclusion purposes. In this case, you must choose procedure "C", which determines the lowest price between two exclusion groups.
Condition records in Condition Tables
Conditions are stored in the system in a condition record Condition tables enables you to vary the key structure of condition records Key fields of condition tables are (generally)
1. Vendor / Material / Purchase Organization / Info record category2. Vendor / Material / Purchase Organization/ Plant / Info record category3. Vendor / Material / Purchase Organization / Info record category/ Order
Unit
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4. Purchase Document / Item / Plant The entries in Condition tables are Key part or DATA part Data part contains the number of condition record Conditions are stored in following tables
1. KONP – Time dependent conditions – Item2. KONH – Header Conditions3. KONM – Quantity scales4. KNOW – Value scales
We can creates new condition tables. The numbering should be between 501 to 999. We can select the required filed from “Field catalogue” We can include the fields of Communication structures like – KOMK, KOMP &
KOMG
PRICING PROCEDURE (Calculation SCHEMA)
It is the frame work for determining the purchase or valuation price, which groups together all the condition types that are relevant to this particular process
The Pricing procedure defines 1. Permissible condition types2. Condition type for which conditions are to be adopted automatically
(Manual indicator)3. Condition types for which the Net price calculation is applied (Statistical
Indicator)4. Order in which the condition types are taken into account in the calculation
of Net or effective price5. Condition types for which subtotals are calculated6. Requirements that must be satisfied before a certain condition type is taken
in to account Sequence of conditions The step numbers of the condition type in the pricing procedure determines the
sequence in which condition types are to be taken in to account in the calculation of net or effective price.
This sequence CAN NOT be changed in the document, even if Condition types are entered manually
Condition type assigned to the same step in the procedure are sorted by means of a counter
With these condition types, the order of manual entry decides the point at which the condition type is taken in to account in the procedure for effective price
You can limit the value of condition by fixing the lower and upper limits of a particular condition in customizing (Define Limits)
If any condition in the schema is not having an access sequence, then the manual tick is a mandatory requirement. If we are not giving the manual tick, this condition type will automatically populated in your document
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SCHEMA DETERMINATION
The system will pick-up the pricing procedure as per the settings made in customizing for schema determination.
Schema Purchasing Organization, Schema group vendor (Attached in Vendor master) and the assignment of pricing procedure for this combination
The schema group of Stock transport order depends on o Purchasing Organizationo Document typeo Supplying Plant
Schema assignment for the calculation of MARKET price in Vendor evaluation depends on Purchase Organization
The pricing procedure for external service management depends on the DOCUMENT TYPE
A uniform pricing procedure per document type
INFO RECORD and ORDER PRICE HISTORY
Info record can be created manually or auto thru documents If Info record is created manually, the GROSS PRICE and supplementary
conditions (Discounts & Surcharges) CAN BE maintained for a certain validity period
If an info record is generated from a Contract, the gross price and supplementary conditions are adopted in the info record
If an info record is generated from a PO or Scheduling Agreement, the conditions ARE NOT ADOPTED in to the info record. But adopted to ORDER PRICE HISTORY
If an info record conditions exists and valid, they are suggested when a new PO is created
R/3 system uses the PO History data, if the valid info record is NOT available In info record list, displays a distinction is made between
Info record conditions – Head word “CONDITION”The conditions in Last PO – Head word “Purchase Order”
HEADER, GROUP & ITEM CONDITIONS
Item Condition – Conditions relating to a single item of document Header condition - % or Fixed amount – Conditions applicable to all the items in
the document No automatic price determination process carried out for Hearse condition. So
there is No access sequence for header conditions Group condition – is a condition relating to several items of a document. The condition values (price/ Order quantity/ Weight/ Volume) of the relevant items
are added and the total used as the condition basis
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Assigning of condition type to header or group condition is defined in customizing of condition type
If a header condition is Fixed amount, the value will be distributed to all the items proportionately
If the header condition is in %, the value will be distributed to all the items by the same %
The group condition value will be proportionately distributed to all items in the document
The scale value of group conditions are applicable to the basis of cumulated item values
Logistics Information System
You can create a filed catalog in MC18 and pull it during MC21 or directly MC21There will be 2 different application areas in MM02 for PURCHIS and 03 for INVCO
Path in Easy Menu – Tools > ABAP workbench > Development > Work flow > Reporting > Workflow information system > Environment > info structures (MC 21/22/23) & Updating (MC24/25/26)
1. Create Info structure – MC21Initial screen
The info structure number should be in between S500 to S999Attributes taken as standard and planning possible selected
Next screen
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See the status as not saveda) Now we have to select the characteristics and key figures of characteristics 3 Characteristics selected – Plant, Vendor & materialb) Now we have to select key figures for these characteristics 1 Key figure total valuated stock selected
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c) Save the Info structure (save as a local object)d) Check the info structure – See that there should not be any error messagee) Now generate the info structure by clicking the icon – See that there should not be any error messagef) Save the info structure
2. Create Update the Info structure – MC24Initial screen
Now we have to mention rules for key figures & characteristicsa) Rules for key figuresClicking on rules for key figures, a pop-up comes. You can click on suggest rules so that system will suggest the entries or you can enter directly
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Select copyb) Rules for characteristicsSystem automatically suggests the table name & filed names
Copy it
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c) Generate – Click on generate icon. See that there should not be any error message
d) Update – Click on update iconSystem will show all info structures.
Select the respective one and look for details
In the pop-up enter the parameters for updation
Now save the updationAgain generate and check for any errors. Save and go back
Now the info structure is ready. You can view it through transaction code – MCSK for inventory) and MCSJ for Purchasing
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Select MCSK in our case, system will call the above info structure and field will be populated as per your requirement
Early Warning System
1. Create an exception in MC/1 transactionSelect an area and give a Name. The structure Name should be SXXX (below200)Choose characteristicsChoose Key figuresGive the requirements for early warningGive the detail of follow-on processing – Mail ID , etcSelect each characteristic and give the Value (Plant – 0001, etc)
2. Create the exception through a transaction- System will send a message as per the configuration
