SAP MM.docx

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SAP MM - TutorialSAP stands for “Systems, Applications and Products in data processing”. Amongst the

software provider, SAP comes up as the worlds third largest. ! "#M employees founded

SAP in $%&' in (alldorf, )ermany.

SAP is an enterprise resource planning software which is produced *y the )erman

corporation.SAP is a enterprise information software that was *asically designed to

manage resources, information and activities that are re+uired to complete *usiness

processes lie procurement and managing orders, *illing of orders and management of

human resources.SAP applications wor with real time data. "t has the a*ility to *e

configured according to the needs of the *usiness. "t allows *usiness to mae rapid

changes in their *usiness re+uirements through a common set of programs.

Audience(ith the ustomer a demand changing rapidly, this module is specially

designed for the learners to understand the supply chain management

system so that maret demands can *e met in shortest possi*le time. This

tutorial will give you enough understanding on SAP MM from where you can

tae yourself to higher level of epertise.

Prere+uisitesA *asic nowledge of /0P concepts will help you in understanding the SAP

Material Management System and move fast on the learning trac.

SAP MM - 1verviewSAP /0P 2/nterprise 0esource Planning3 is commercial software that will

integrate all information altogether in a single software considering various

factors lie time and cost. 1rgani4ations can easily meet their *usiness

demands with the help of SAP.

SAP #usiness ProcessSAP MM is nown as SAP Material Management system. SAP MM role in

*usiness process is as follows5



• A *usiness process in SAP is termed as “Module”.

• SAP Materials Management 2MM3 is a part of 6ogistics area and helps to manage

the procurement activity of an organi4ation from procurement.

• "t supports all aspects of material management 2planning, control etc3.

• "t is the *ac*one of the 6ogistics area which incorporates modules lie Sales

and 7istri*ution, Production Planning, Plant Maintenance, Pro8ect Systems,

(arehouse Management which are etremely o*sessed on Materials

Management module.

9eatures of SAP MM

The features of SAP MM system are as follows5

• SAP MM is one of the modules of SAP that deals with material management and

inventory management.

• Material Management process ensures that there is never a shortage of

materials or any gaps in the supply chain process of the organi4ation. SAP MM

speeds up the procurement and material management activities maing the

*usiness run smoother with complete time and cost efficiency.

• "t deals with managing the materials 2products and or services3 resources of an

organi4ation with the aim of accelerating productivity, reducing costs and

increase improvement and at a similar time *e versatile to accommodate

changes in day to day life.

• "t deals with the Procurement Process, Master 7ata 2Material : ;endor Master3,

Account 7etermination : ;aluation of Material, "nventory Management, "nvoice

;erification, Material 0e+uirement Planning etc.

SAP MM - Screen <avigationThe first step to understand SAP is to have *asic nowledge of screens lie

6ogin screen, 6ogout screen and so on. 9ollowing screens will descri*es

a*out the screen navigation and the functionalities of standard tool-*ar.

6ogin Screen



6og on to SAP /0P server. SAP login screen will prompt for =ser "7 and

Password. Provide the valid user "7 and Password and press enter. The user

id and password is provided *y system administrator. 9ollowing is the login

screen5

Standard Tool-*ar "con

SAP screens tool-*ar are shown in the following image5



SAP screen tool-*ars are *riefly descri*ed as5

• Menu Bar - Menu *ar is the top line of dialog window in the SAP system.

• Standard Toolbar - Standard functions lie save, top of page, end of page,

page up, page down, print, etc. are availa*le in tool*ar.

• Title Bar - Title #ar displays the name of the application>*usiness process you

are currently in.

• Application Toolbar - Application specific menu options are availa*le on this

tool*ar.

• Command Field - To start a *usiness application without navigating through

the menu transaction, some logical codes are assigned to the *usiness

processes. Transaction codes are entered in the command field to directly start

the application.



Standard /it ?eys

/it eys are used to eit the module or to log off. They are used to go *ac

to the last accessed screen. 9ollowing are the standard eit eys used in

SAP5

<ew Session "con

9or creating a new session we use the following eys shown in the *elow

image5



6og 1ff

"t is a good practice to log off from the SAP system when you finish your

wor. There are several ways of login off from the system *ut it can *e

done





right amount is termed as Procurement. The +uality of procurement is

attempting to “get the right *alance”, consider the following eample5

• 1rgani4ations try and eep inventory levels at a minimum due to the prices

associated with high levels of inventory@ however at identical time it is veryepensive to prevent production due to shortages in raw materials.

• )etting the minimum price for a product or service is often necessary, however

the *alance *etween product availa*ility, +uality, and vendor 2seller3 relations is

also necessary.

Procurement 6ifecycleMost modern organi4ations procurement follow some se+uential steps which

are descri*ed *elow5

0e+uirement and "nformation )athering

Procurement process starts with gathering information a*out product and

its +uantity. Then for re+uired products and services, it is necessary to loo

for suppliers who can satisfy the re+uirements.

Supplier ontact

After gathering re+uirements one will loo for the suppliers who can fulfill

the re+uirements. #ased on that +uotation re+uest or information re+uest

can *e made to suppliers or direct contact can *e made with them.

#acground 0eview

1nce the supplier is nown product>service +uality is checed, and any

necessities for services such as installation, warranty and its maintenance

are investigated. Some samples of the products can *e o*tained for +uality

eamination.

<egotiation

Some negotiations with suppliers is made regarding price, availa*ility and

delivery schedule of the products>services. After this a contract is signed

that is a *inding legal document *etween supplier and ordering party. A

contract will include all necessary information lie price and +uantity of

material, delivery date, etc.



1rder fulfillment

1rdered material will *e shipped, delivered to the ordering party and

supplier is paid accordingly. Training and "nstallation of product or services

may also *e included.

onsumption, Maintenance and 7isposal

As the products>service is consumed the performance of the products or

services is evaluated and any follow up service support if re+uired is

analy4ed.

ontract 0enewal

1nce the product or services are consumed or contract epires and needs to

*e renewed, or the product or service is to *e re-ordered, company

eperience with vendors and service provider is reviewed. "f the products or

services are to *e re-ordered, the company decides whether to order from

previous supplier or thin a*out new suppliers.

#asic Procurement Activities#asic Procurement activities flow is given in the following image5



A *rief introduction of Procurement activities is given *elow5

Procurement Activities Description

7etermination of re+uirement "t is the logical su*division where it isdetermined that what material or servicesare re+uired to company, and whichsupplier can fulfill the re+uirement.

reating Purchase 0e+uisition "t is the phase in which purchasing

department is informed a*out there+uirement of items or services re+uired



for *usiness purpose. A re+uisition is a

internal document.

reating Purchase 1rder "t is the phase when order is created from

re+uisition and it is approved and assignedto a supplier.

)oods receipt> "nvoice 0eceived "t is the phase in which the material isreceived *y the company and the conditionand +uality are verified. "n this phase"nvoice is received from the vendor 2seller3.

"nvoice verification> ;endor Payment "t is the phase in which the vendor 2seller3is paid from the company and reconciliation

of the invoice and P1 is accomplished.

Type of #asic ProcurementThere are ' types of #asic procurement which are shown *elow5

• Procurement for Stoc vs onsumption

• /ternal vs "nternal Procurement

Procurement for Stoc vs onsumption

The following points show the difference of Procurement for Stoc vs.

onsumption5

• Procurement for Stock - A stoc material is a material that is ept in stoc.

These materials are ept in stoc once received from the vendor. The stoc of

this material eeps on increasing or decreasing *ased on amount of the +uantity

received or issued. To order a material for stoc, the material must have a

master record within the system.

• Procurement for Direct Consumption - (hen procurement is for direct

consumption i.e. it will *e consumed as soon as it is received, the user should

specify the consumption purpose. To order a material for consumption, the

material may have a master record within the system.



/ternal vs "nternal Procurement

The following points show the difference of /ternal vs "nternal

Procurement5

• Eternal procurement - "t is the process of procuring goods or services from

eternal vendors. There are *asic forms of eternal procurement generally

supported *y the Purchasing component of "T system.

!ne time orders are generally used for material and services that are ordered

irregularly.

"on#er-term contracts $it% t%e subse&uent issue of release orders - 9or

materials that are *eing ordered regularly and in large +uantities, we can

negotiate deal with the vendor 2seller3 for pricing or conditions : record then ina contract. "n a contract you also specify the validity date.

"on#er-term sc%edulin# a#reements and delivery sc%edules - "f a

material is ordered on an everyday *asis and is to *e delivered according to an

eact time schedule, then you set up a scheduling agreement.

• 'nternal Procurement - 6arge corporate organi4ations may own multiple

separate *usinesses or companies. "nternal Procurement is process of getting

material and services from among identical company. So, each of thesecompanies maintains a complete *ooeeping system with separate #alance,

Profit : 6oss Statements so that when trade occurs *etween them it will *e

recorded.

Special ProcurementSpecial stocs are stocs that are managed differently as these stocs did

not *elong to company and these are *eing ept at some particular

location. Special procurement and special stocs types are divided into the

su*se+uent areas.

onsignment Stocs

Material that is availa*le at our store premises, however it still *elongs to

the vendor 2seller3>1wner of the material. "f you utili4e the material from

consignment stocs, then you have to pay to the vendor.





many levels which have relationship to one or another. 1rgani4ation

structure is also referred as enterprise structure. /nterprise structure is

made up of many organi4ational units having relationship with one another.

SAP "mplementation )uide(hen client purchases SAP it comes in a 7 in form of software. (hen SAP

is first installed, SAP has its standard set up that needs to *e configured

according to the need of client i.e. organi4ation.

onfiguration of SAP software lie add fields, to change field names, to

modify drop down lists etc. to ad8ust according to woring of your

organi4ation is done through implementation guide nown as "M). "M) is

where we define enterprise structure and other settings that are re+uired

for functioning of SAP software according to need of an organi4ation.

SAP "M) PathTo do any type of configuration according to our organi4ation need the first

step is to reach the implementation 2"M)3 guide screen. (e can reach

implementation guide in ' ways5

• Menu path

• Transactional code

Menu path

(e can navigate through the following path to reach out to "M)5

SAP /asy Access DE Tools DE ustomi4ing DE "M) DE /ecute Pro8ect





Transactional code

#est and simple way to reach out any SAP screen is Tode i.e. transactional

code. Transactional code to reach out "M)5 SP01 2SAP Pro8ect 0eference

1*8ect3. /nter the Transaction code in command field and then clic on

enter.

SAP "M)"M) screen can *e reached out 8ust *y following the *elow steps5

After SP01, on the net screen clic on SAP 0eference "M).



<et Screen will appear as follows. This is the final screen from where we

can do configurations.





Menu path for MM onfigurationThe main menu paths for MM area are as follows5

• SAP ustomi4ing "mplementation )uide 2"M)3 DE /nterprise Structure DE

7efinition

• SAP ustomi4ing "mplementation )uide 2"M)3 DE /nterprise Structure DE

Assignment

• SAP ustomi4ing "mplementation )uide 2"M)3 DE 6ogistics DE )eneral DE

Material Master

• SAP ustomi4ing "mplementation )uide 2"M)3 DE Materials Management

SAP MM - /nterprise Structure/very organi4ation has some framewor or some structure is defined

according to which the whole *usiness runs. /nterprise structure is the

structure that represents an enterprise in SAP /0P system. "t is su*divided

into various organi4ational units which for legal reason or *usiness related

reason are grouped together.

/nterprise structure defines various levels in an organi4ation. These levels

are placed according to some hierarchy. /ach level has some specific

functionality associated with it, which in a com*ined way descri*es the

woring of an organi4ation. Also enterprise structure defines various

organi4ational units that are present in an enterprise. The 1rgani4ational

Structure in MM consists of following 1rgani4ational 6evels5

• lient

• ompany ode

• Plant

• Storage 6ocation

• Purchasing 1rgani4ation



• Purchasing )roup

9ollowing diagram is one such organi4ational structure which descri*es the

levels incorporated in an organi4ation. lient *eing at the topmost, followed

*y multiple company code, followed *y multiple plants, plants havingmultiple storage location with their own or centrali4ed purchasing

organi4ations.

lientThe fundamental eplanation of lient is as follows5

• lient is a commercial organi4ational unit in 0> system.

• "t has its own set of master data with independent ta*le sets.

• According to hierarchy, lient is at highest level in SAP system.

• 7ata that is maintained at client level is valid for all organi4ational levels.

ompany odeThe fundamental eplanation of ompany ode is as follows5

• (ithin lient, ompany code is the independent accounting unit.



• "t is a legal entity that has its own profit, loss and *alance statement.

• "t is the smallest unit in organi4ation for which a complete independent account

set can *e replicated.

PlantThe fundamental eplanation of Plant is as follows5

• Plant is an organi4ational unit within a company where activities tae place. A

plant will produce goods and maes goods availa*le for the company.

• "t is unit having manufacturing facility, warehouse distri*ution center or a

regional sales office within logistic. "t su*divides an enterprise in different

aspects.

Storage 6ocationThe fundamental eplanation of Storage 6ocation is as follows5

• Storage location is an organi4ational unit which actually differentiates *etween

different material stocs in a Plant.

• Storage location is a place where stoc is ept physically.

• Plant can *e consisting of multiple storage location. All data is stored at storage

location level for a particular storage location.

Purchasing 1rgani4ationThe fundamental eplanation of Purchasing 1rgani4ation is as follows5

• Purchasing 1rgani4ation is an organi4ational unit under company or plant which

is responsi*le for procurement activities according to re+uirements. "t is

responsi*le for eternal Procurement.

• Purchasing organi4ation can *e at client level i.e. centrali4ed purchasing

organi4ation.

• Purchasing organi4ation can *e at company or plant level i.e. company specific

or plant specific



7ifferent forms of purchasing can *e descri*ed as follows5

entrali4ed Purchasing

Purchasing organi4ation is not assigned to any company code it procures for

all company codes *elonging to different client.

ompany specific Purchasing

Purchasing organi4ation is assigned to a company code only, Plant

*elonging to the company code can purchase through this Purchasing

organi4ation.

Plant specific Purchasing

Purchasing organi4ation is assigned to a Plant, only this specific Plant can

purchase through this Purchasing organi4ation.

Purchasing )roupThe fundamental eplanation of Purchasing )roup is as follows5

• Purchasing group is an organi4ational unit which is responsi*le for everyday

procurement activities within an organi4ation.

• "t is a *uyer or group of *uyer responsi*le for procurement activities in a

purchasing organi4ation.

SAP MM - 7efining 1rgani4ational

StructureAs discussed organi4ation structure is the framewor of company which

descri*es the entire structure and functioning of a company. 1rgani4ation

structure is designed in a way that it is split into different levels and each

level is placed according to hierarchy. These levels have relationship to oneanother. The various levels in a standard organi4ation are as follows5

• ompany

• ompany code



• Plant

• Storage 6ocation

• Purchasing 1rgani4ation

• Purchasing )roup

All the 7efinitions in SAP will *e done through 7isplay "M) screen as shown

*elow5

Path to reach 7efinition5 "M) DE /nterprise Structure DE 7efinition



reate ompanyompany is the topmost organi4ational unit after client which incorporates

individual financial accounting statements of several company codes. A

company can have many company codes. "n SAP it is optional to create

company. 9ollowing steps will tae you through the procedure of creating

company.





9ill in all necessary details lie name of company, address of company with

street num*er, city, country and postal code. lic on save icon. A new

company will *e created.



reate ompany odeA company code is the smallest organi4ational unit after company for which

stand-alone financial accountingCs, profit and loss statements can *e

withdrawn. Many company codes can *e assigned to one company.

9ollowing steps will tae you through the procedure of creating company

code5

Path to create ompany ode5

"M) DE /nterprise Structure DE 7efinition DE 9inancial Accounting DE

/dit, opy, 7elete, hec ompany odeTode5 1FG'

1n display "M) screen select /dit, opy, 7elete, hec ompany ode

eecute icon *y following the a*ove path.





9ill in all necessary details lie ompany code, company name along with

city, country, currency, language. lic on save icon. A new company code

will *e created.





Select 7efine Plant icon to create a new plant.





9ill in all necessary details lie plant name along with detailed information

lie 6anguage, House no.,city, country, region, postal code. lic on save

icon. A new plant will *e created.



reate Storage 6ocationStorage location is an organi4ational unit which actually differentiates

*etween different material stocs in a Plant. Storage location is a place

where stoc is ept physically. Plant can *e consisting of multiple storage

location. All data is stored at storage location level for a particular storage

location. 9ollowing steps will tae you through the procedure of creating

Storage location5



Path to reate Storage 6ocation5

"M) DE /nterprise Structure DE 7efinition DE Materials Management DE

Maintain Storage 6ocation

Tode5 1FG%

1n display "M) screen select Maintain Storage 6ocation eecute icon *y

following the a*ove path.

/nter the name of plant for which you want to create storage location.



Select <ew /ntries icon.



/nter the name of storage location along with the description of storage

location. lic on save icon after filling re+uired information. A new Storage

6ocation will *e created.

reate Purchasing 1rgani4ationPurchasing 1rgani4ation is an organi4ational unit under company or plant

which is responsi*le for procurement activities according to re+uirements. "t

is responsi*le for eternal Procurement. Purchasing organi4ation can *e



specific to plant or company. 9ollowing steps will tae you through the

procedure of creating Purchasing 1rgani4ation5

Path to reate Purchasing 1rgani4ation5

"M) DE /nterprise Structure DE 7efinition DE Materials Management DEMaintain Purchasing 1rgani4ation

Tode5 1FGI

1n display "M) screen select Maintain Purchasing 1rgani4ation eecute icon

*y following the a*ove path.






/nter the name of purchasing organi4ation along with the description of it.

lic on save icon after. A new Purchasing 1rgani4ation will *e created.



reate Purchasing )roupPurchasing group is an organi4ational unit which is responsi*le for everyday

procurement activities within an organi4ation. 9ollowing steps will tae you

through the procedure of creating Purchasing )roup5

Path to reate Purchasing )roup5

"M) DE Materials Management DE Purchasing DE reate Purchasing )roup

Tode5 1M/J



1n display "M) screen select Maintain Purchasing )roup eecute icon *y

following the a*ove path.




/nter the name of purchasing group along with the description of it with

telephone no., fa no, etc. lic on save icon. A new Purchasing )roup will

*e created.



SAP MM - 1rgani4ational =nits1rgani4ational units com*ined altogether form the framewor of company.

These organi4ational units can *e considered as different levels which

descri*e the structure of an enterprise. /very level has some particular

functionality associated with it. Also every level in one or other way is

related to each other. These levels are placed according to some hierarchy

company *eing at the top.



To esta*lish relationship *etween these levels we have to assign them to

one or other in such a way that they still lie in the same hierarchy. 9or

/ample5 As ompany is at top level and plant is *elow it, so it is necessary

that plant has some relation with company 2As plant is a su* part or smaller

division of company3, so plant will *e assigned to company. 9our *asic and

must assignments in standard SAP are5

• Plant to ompany code

• Purchasing organi4ation to company code

• Purchasing organi4ation to Plant

• Standard purchasing organi4ation to plant

All the assignments in SAP will *e done through 7isplay "M) screen as

shown *elow.

Path to reach Assignment5 "M) DE /nterprise Structure DE Assignment



Plant to ompany odePlant is one level *elow company code. So we need to assign plant to

company code. 9ollowing steps will tae you through the procedure of

assigning plant to company code5

Path to assign plant to company code5

"M) DE /nterprise Structure DE Assignment DE Assign Plant to ompany



ode

Tode5 1F$I

1n display "M) screen select Assign plant to company code eecute icon *y

following a*ove path.




/nter name of plant and company code. lic on save. Plant is now

assigned to company code.





1n display "M) screen select Assign Purchasing 1rgani4ation to ompany

ode eecute icon *y following the a*ove path.

(e can view eisting assignment and also we can change accordingly. lic

on save after maing changes. Purchasing organi4ation is now assigned to

company code.



Purchasing 1rgani4ation to PlantPurchasing organi4ation can *e at plant level i.e. plant specific. So we need

to assign this purchasing organi4ation to plant. 9ollowing steps will tae you

through the procedure of assigning purchasing organi4ation to plant5

Path to assign purchasing organi4ation to plant5

"M) DE /nterprise Structure DE Assignment DE Materials Management DE

Assign Purchasing organi4ation to Plant

Tode5 1F$&



1n display "M) screen select Assign purchasing organi4ation to plant

eecute icon *y following the a*ove path.

Select <ew /ntries "con.



/nter name of plant and purchasing organi4ation. lic on save. Purchasing

organi4ation is now assigned to plant.



Standard Purchasing 1rgani4ation to PlantStandard purchasing organi4ation is the default purchasing organi4ation. (e

can sometimes assign standard purchasing organi4ation to some specific

plant if we want to have default purchasing organi4ation for that plant.

9ollowing steps will tae you through the procedure of assigning standard

purchasing organi4ation to plant5

Path to assign standard purchasing organi4ation to plant5

"M) DE /nterprise Structure DE Assignment DE Materials Management DE



Assign Standard Purchasing 1rgani4ation to Plant

Tode5 SP01

1n display "M) screen select Assign standard purchasing organi4ation to

plant eecute icon *y following a*ove path.

(e can view eisting assignment and also we can change accordingly. lic

on save after maing changes. Standard purchasing organi4ation is now

assigned to plant.



SAP MM - Master 7ata

Advertisements

SAP R/3 works on real time data that is there is no time lag between data entry and data availability. The

important thing while creating any data is to maintain data integrity. SAP R/3 data is categorized into two:





)aterial Types

T4ode: 5)S6

5n display #) screen select !e"ine Attrib$tes o" )aterial Types e'ec$te icon by "ollowing the above path.

Select 7ew &ntries icon.



%ill in the re$ired in"ormation like name o" material type and description. 4lick on save. A new material type

will be created.



)aterial ro$ps

)aterial gro$p is a wider range o" material type. )aterials with some common attrib$tes are taken together

and they are assigned to material gro$p. %or &'ample: S$ppose we have some materials which need

packaging* so there material type can be electrical or "ood prod$cts b$t we can gro$p these material types

and p$t them in packaged material gro$p. )aterial ro$p can be created by "ollowing below steps:





&nter the name o" material gro$p along with its description. 4lick on Save. A new material gro$p will be

created.



7$mber Range

9hen we create material master record every material is recognized by a n$mber* that n$mber will be $ni$e

and known as material n$mber. 9e can assign n$mber to material thro$gh two ways:

• &'ternal n$mber assignment 9hile creating material yo$ have to enter yo$r own n$mber

+containing alphabets or digits,* and that sho$ld be $ni$e.

• #nternal n$mber assignment 9hile creating material yo$ need not enter any n$mber* system will

a$tomatically generate a $ni$e n$mber to that material.

Define Number Range:





Select #ntervals #con.



9e can de"ine n$mber range here and &T +e'ternal tab* i" it is checked then e'ternal n$mber assignment

can be done in that material,. 4lick on save. 7$mber Range is now de"ined "or the material.



Assignment of Number Range:

A"ter de"ining we need to assign it to material gro$p. 7$mber range can be assigned by "ollowing the below

steps.

#n the same screen as shown above select ro$ps tab.

%or a partic$lar material gro$p we can assign n$mber range here. 4lick on save. 7$mber range is now

assigned to material gro$p.



)aterial )aster 4reation)aterial master contains all materials that a company proc$res prod$ces or sells. )aterial )aster is a central

data that is available at all the levels. )aterial can be created by "ollowing the below steps:

Path to create )aterial )aster:

2ogistics 10 )aterials )anagement 10 )aterial )aster 10 )aterial 10 4reate )aterial

T4ode: ));<

Note: %or any create transaction we $se ;<* "or edit ;6* "or display ;3 as s$""i'.

5n SAP )en$ screen select create icon by "ollowing the above path.



%ill in all re$ired details like material n$mber +i" e'ternal n$mber assignment,* material type* ind$stry sector.



Select the views yo$ want to maintain "or yo$r material.



&nter name o" plant and storage location.



&nter the re$ired in"ormation in yo$r material views like $nit o" meas$re* c$rrency* standard price* moving

price etc. 4lick on save. A new material will be created.



(endor )aster !ata

The key points abo$t vendor master are as "ollows:

• This is the enterprise main so$rce o" vendor speci"ic data. This data will incl$de in"ormation on

vendors "rom which a company can proc$re or it can sell.

• (endor )aster Record will contain in"ormation like vendor=s name* address.

• !ata in vendor master record is divided into three categories:

General Data:eneral data is maintained at client level and it is valid "or all organizational levels.

Accounting Data:Acco$nting data is maintained at company level and it is valid "or all plants

belonging to that company.

Purchasing Data:P$rchasing data is maintained at p$rchasing organization level.

(endor master has the three characteristics which will be disc$ssing one by one in below conte't.

(endor Acco$nt ro$p



(endors are categorized according to re$irements and some o" the vendors having similar characteristics

are gro$ped together and placed in one category. %or &'ample: All local vendors can be placed $nder one

acco$nt gro$p. (endor Acco$nt gro$p can be created by "ollowing the below steps.

Path to create (endor Acco$nt ro$p:#) 10 2ogistic eneral 10 $siness Partner 10 (endors 10 4ontrol 10 !e"ine Acco$nt gro$p and "ield

selection+vendor,

T4ode: 5!3

5n display #) screen select !e"ine Acco$nt gro$p and "ield selection +vendor, e'ec$te icon by "ollowing the

above path.





%ill in all necessary details like name o" acco$nt gro$p* general data* and "ield stat$s. 4lick on save. A new

(endor Acco$nt ro$p will be created.



7$mber Range

9hen we create vendor master record every vendor is recognized by a n$mber* that n$mber will be $ni$e

and known as vendor n$mber. As disc$ssed in material master* in similar way we have e'ternal as well as

internal n$mber assignment "or vendor master.

Define Number Range:

7$mber range can be de"ined by "ollowing the below steps:

Path to create 7$mber Range:

#) 10 2ogistic eneral 10 $siness Partner 10 (endors 10 4ontrol 10 !e"ine 7$mber Range "or (endor

master record

T4ode: !7<



5n display #) screen select !e"ine 7$mber Range "or (endor master record e'ec$te icon by "ollowing the

above path.

Select change #nterval icon. #t will create n$mber range "or c$stomer acco$nt.



Select the #nsert #nterval #con.

9e can de"ine n$mber range here and &T +e'ternal tab* i" it is checked then e'ternal n$mber assignment

can be done in that vendor,. 4lick on save. A new 7$mber Range will be created.



Assignment of Number Range

A"ter de"ining we need to assign it to vendor gro$p. 7$mber range can be assigned by "ollowing the below

steps.

5n the same screen as shown above select 7$mber Range tab.



%or a partic$lar vendor gro$p assign n$mber range here. 4lick on save. 7$mber range is now assigned to

vendor gro$p.



4reation o" (endor )aster

(endor )ater contains list o" vendors "rom which a company can proc$re or it can sell. (endor )aster can be

created by "ollowing the below steps:

Path to create (endor )aster:

SAP )en$ 10 2ogistics 10 )aterial )anagement 10 P$rchasing 10 )aster !ata 10 (endor 10 4entral 10

4reate

T4ode: 8;<

5n SAP )en$ screen select create "or central vendor data e'ec$te icon by "ollowing the above path.



%ill in all re$ired details like company code* p$rchasing org* vendor no.+#" e'ternal n$mber assignment,.





%ill in the necessary bank details o" vendor.



%ill in the necessary acco$nting in"ormation o" the vendor.



%ill in the terms o" payment that are de"ined between company and vendor. 4lick on save. A new vendor

master will be created.



SAP MM - Purchase "nfo 0ecordSAP 0> wors on all real time data that include material master and vendor

master. Material and vendor master are separate data records for eeping

information of materials and vendors from which material is procured. The

com*ined information of material and vendor altogether is ept in a record

that we call as purchase info record. The ey points a*out purchase info

record are as follows5

• Purchasing info record stores information on material and vendor supplying that

material. 9or /ample5 ;endors current price of a particular material is stored in

info record.

• Purchase info record can *e maintained at plant level or at purchasing

organi4ation level.



• "nfo record can *e maintained for four procurement types which are as follows5

Standard5 Standard info record has information on standard orders 2orders

include details of vendor and material3. This info record will include vendors

price for supplying the particular material.

Subcontractin#5 Su*contracting info record has information on su*contract

orders. This info record will include price for assem*ling the raw material that is

supplied *y the ordering party.

Pipeline5 Pipeline info record has information on material that is provided *y

vendor through pipes. 9or /ample5 lie water,electricity.

Consi#nment5 onsignment info record has information on material that is ept

at ordering party premises. This info record contains vendors price that is to *e

paid for withdrawing material from consignment stoc.

reation of Purchase "nfo 0ecordPurchase info record can *e created *y following the *elow steps5

Path to create "nfo 0ecord5

6ogistics DE Material Management DE Purchasing DE Master 7ata DE "nfo

0ecord DE reate

Tode5 M/$$

1n SAP Menu screen select reate icon *y following the a*ove path.



/nter the vendor num*er and in info category select standard or

su*contracting or pipeline or consignment according to the re+uirement.



9ill in re+uired details lie material group, $st>'nd>rd reminder, vendor

material num*er, personal details, order unit, origin data and sort term.



Provide the info record note that can *e called as info record description.lic on save. A new info record will *e created.



SAP MM - Source 7etermination>6istThe com*ined information of material and vendor altogether is ept in a

record that is nown as purchase info record. #ut a particular material can

*e ordered from different vendors in different time intervals. This

information can *e maintained in a list that is called as source list. The ey

points a*out source list are as follows5

• Source list include list of possi*le sources of supply for a material over a given

framewor of time.

• Source list specifies the time period of ordering of a particular material from a

given vendor.

• Source list can *e copied from one plant to another plant.

Source list can *e created *y following two ways5



• Automatically

• Manually

Automatic reation of Source 6istSource list can *e automatically created *y doing some setting in material

master. Automatic source list can *e created *y following the *elow steps.

)o to MMG'2/dit mode of material master for which you want to create

source list automatically3. Select all the views.



"n purchasing view chec the *o for source list. lic on save. Source list

will *e created automatically for the material.



Manual reation of Source 6istSource list can *e created manually *y following the *elow steps5

Path to maintain Source list5

6ogistics DE Material Management DE Purchasing DE Master 7ata DE

Source 6ist DE Maintain

Tode5 M/G$



1n SAP Menu screen select Maintain eecute icon *y following the a*ove

path.





/nter the material num*er for which you want to maintain source list and

respective plant details.

9ill in all necessary details lie valid periods, name of vendor, purchasing

organi4ation. lic on save icon. Source list for the material is now

maintained.



SAP MM - Procurement ycle

/very organi4ation ac+uires material or services to complete its *usiness

needs. The process of *uying materials and o*taining services from vendors

or dealers is procurement. The steps which are re+uired to procure a

material forms the procurement cycle. /very organi4ation performs some

common se+uential steps so that a material can *e procured in right

+uantity at the right price. The important steps in procurement cycle are as

follows5

• 7etermination of 0e+uirement

• reating Purchase 1rder

• Posting )oods 0eceipt

• Posting "nvoice

7etermination of 0e+uirementThis is the first step in procurement cycle. "t is the logical su*division where

it is determined that what material or services are re+uired *y company,

and which supplier can fulfill the re+uirement. A list of re+uirements is

made and then it is approved *y senior authority within the organi4ation.

After approval, formal list is made that is nown as purchase order with one

more level of approval which is sent to the vendor.

reating Purchase 1rderPurchase order is the formal and final confirmation of the re+uirements

which is sent to vendor to supply material or services. Purchase order will

include important information lie name of material with its corresponding

plant, details of purchasing organi4ation with its company code, name of

vendor,and date for delivery of material. Purchase order can *e created *y

following the *elow steps5



Path to create Purchase 1rder5

6ogistics DE Materials Management DE Purchasing DE Purchase 1rder DE

reate DE ;endor> Supplying Plant ?nown

Tode5 M/'$<

1n SAP Menu screen select reate ;endor>Supplying Plant ?nown eecute

icon *y following the a*ove path.



9ill in all necessary details lie name of vendor, purchasing organi4ation,

purchasing group, company code, details of material lie material num*er,

price, currency, plant.

9ill in all necessary details under "tem *y selecting the ta*s lie

"nvoice>7elivery Ta* 2Provide the ta code, Payment terms and conditions,

and incoterms3, Assignment Ta* 2Provide the valid )>6 code, *usiness area,

and (#S element. lic on save. A new Purchase 1rder will *e created.





Posting )oods 0eceiptAfter processing of purchase order *y vendor, material is delivered to

ordering party and this process is called as goods receipt. So, goods receipt

is the phase in which the material is received *y the ordering party and the

condition and +uality are verified. 1nce material is verified against +uality

then goods receipt is posted. )oods receipt can *e posted *y following the

*elow steps.





9ill in all necessary details lie movement type2$G$ for goods receipt3,

name of material, +uantity received, detail of storage location and plant in

which the material will *e placed. lic on save. )oods 0eceipt is now

posted for the material.



Posting "nvoice"nvoice is received from the vendor after goods receipt, and then invoice is

verified *y the ordering party. So, this is the phase in which the vendor

2seller3 is paid from the company and reconciliation of the invoice and P1 is

accomplished. "nvoice can *e posted *y following the *elow steps5

Path to post "nvoice56ogistics DE Materials Management DE 6ogistic "nvoice verification DE

7ocument /ntry DE /nter "nvoice

Tode5 M"01

1n SAP Menu screen select /nter "nvoice eecute icon *y following the

a*ove path.



9ill in all necessary details lie invoice posting date, amount that is paid to

vendor along with +uantity for which amount is paid. lic on save. "nvoice

is now posted for the goods receipt.



SAP MM - Purchase 0e+uisitionProcurement in every organi4ation starts with gathering re+uirements. 1nce

re+uirements are gathered we need to inform the purchasing organi4ation.

Purchase 0e+uisition is a document that will contain list of re+uirements.

The ey points a*out purchase re+uisition are as follows5

• Purchase re+uisition is a re+uest that is made to purchasing organi4ation to

procure certain list of material.

• Purchase re+uisition is an internal document@ specifically it remains within the

organi4ation.

• Purchase re+uisition needs approval from purchasing organi4ation.



• "f purchase re+uisition is approved then changes are possi*le only to limited

etent.

• Purchase re+uisition can *e created for the following procurement types5

Standard5 )etting finished material from vendor.Subcontractin#5 Providing raw material to vendor and getting finished

material.

Consi#nment5 Procuring material that is ept in companys premises and

paying to vendor for that.

Stock transfer5 )etting material from within the organi4ation.

Eternal service5 )etting services lie maintenance from third party vendor.

reate Purchase 0e+uisitionPurchase 0e+uisition can *e created *y following *elow steps5

Path to reate Purchase re+uisition5

6ogistics DE Materials Management DE Purchasing DE Purchasing

0e+uisition DE reate

Tode5 M/!$<

1n SAP Menu screen select reate eecute icon *y following the a*ove

path.



9ill in all re+uired details lie name of material, +uantity, delivery date,

material group, plant. lic on save. A new Purchase 0e+uisition will *e

created.





After creating purchase re+uisition, we need to send our re+uirements to

vendor. 0e+uirements to vendor are sent through a document that is nown

as purchase order. Purchase order can *e directly created from purchase

re+uisition.

reating Purchase 1rder from Purchase0e+uisitionPurchase 1rder from purchase re+uisition can *e created *y following *elow

steps5

Tode5 M/'$<

/nter Tode to go to purchase order home screen. Select Purchase

re+uisition as shown in *elow image.



Provide purchase re+uisition num*er for which you want to create purchase

order. Then select eecute icon.



7rag the standard reference Purchase re+uisition to the cart net to <#

Standard P1.



;erify the details of purchase order and do the necessary changes as per

re+uirement. lic on save. Purchase order from purchase re+uisition will *e

created.



Date post:	05-Jul-2018
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