SAP MM/WM

Configuration Pack

Enterprise Structure
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 INDEX
Over-view:-..........................................................................................................................4
Getting into the Configuration area of SAP.......................................................................13
Enterprise structure ...........................................................................................................16
Define valuation level....................................................................................................18
Define Plant...................................................................................................................20
Maintain plant details and Factory calendar in Plant.....................................................23
Define Location.............................................................................................................25
Maintain Storage Location.............................................................................................27
Maintain Purchase organization ....................................................................................31
Assign Plant to company...............................................................................................33
Assign purchase organization to the company code......................................................34
Assign purchase organization to plant ..........................................................................35
Material Master .................................................................................................................36
Assign field to field selection groups.............................................................................37
Define plant specific field and screen selection.............................................................41
Define material type.......................................................................................................42
Define Number range for each material type.................................................................46
Define industry sector ...................................................................................................48
Maintain user specific settings.......................................................................................49
Set material block for goods movement........................................................................52
Define storage location MRP per plant..........................................................................54
It gives me a great thrill to present before you the SAP

MM/WM configuration pack. All this would not have been

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Over-view:-

MM Module is the one of the most important logistics

modules in SAP. MM module covers the following basic
functions

• Planning

• Procurement

• Inventory Management

Planning: -

The following are the two types of planning in MM module.

• Consumption Based Planning

• Material Requirement Planning

Consumption Based Planning is based on past consumption

pattern. In this type of planning requirement is triggered by
the stock level and NOT by any planned independent
requirement or dependant requirements.

Material Requirement Planning is the detailed planning

based on requirements and stock levels.

Procurement: -

Procurement activities involves everything from the stage of

identifying vendors up to making payments to the respective
vendor.
The following are the important procurement functions: -

• Identify the vendor

• Negotiate the terms and conditions

• Release the purchase order

• Follow up for supplies

• Ensure right quantity and quality materials are received

at right time

• Ensure payment to the vendor at right time as per the

agreement terms.

Procurement Proposals: -

As a result of planning, procurement proposals are created

for the net requirement quantities either in terms of planned
order or as purchase requisitions.

If it is a planned order, it has to be converted to the

purchase requisition. This is an important function between
planner and the procurement person.

If purchase requisitions are directly generated, it has to be

converted to purchase order.

Purchasing: -

Purchasing is the process of releasing the document to the

identified vendor authorizing him to supply the materials at
a negotiated price.

Three important purchasing methods are

a. Purchase Order
 b. Contracts

c. Scheduling Agreement

a. Purchase Order: - It is the process of issuing PO to the

vendor requesting him to supply according to the
requirements as a one time or as per the delivery schedule.

b. Contracts: - Contracts of quantity based or rate based can

be issued to the vendor authorizing him to supply till
reaching certain quantities or certain value of supply is
reached. Every contract will have a release order.

c. Scheduling Agreement: -

Scheduling agreement is similar to PO. It will specify the

quantity, rate but the schedule of delivery will be informed
through the delivery schedule to the vendor.

Each scheduling agreement will have a delivery schedule. If

scheduling agreement is available with a vendor, MRP can
automatically create the delivery schedule instead of PR or
Planned order during MRP run.

Inventory Management: -

Entire stocks and material movements are dealt in inventory

management. Each material movement is associated with a
movement type number. Movement type is responsible to
determine the right GL account for FI postings.

When performing the inventory management transactions

system performs the following actions instantly

• Material document is generated

• FI document is generated
• Controlling document is generated
• Inventory is adjusted
Inventory Management is tightly integrated with MRP and
MRP data.
Master Data in MM: -

As in every module, Master data plays a major role in MM

module as well. Following are the important master data in
MM module.

• Material Master (across all modules)

• Vendor Master

• Purchase Info record

• Quota arrangement (MM and PP modules)

• Source List

Integration of MM with other Modules: -

Materials Management and its component inventory

management is directly linked with MRP, purchasing and
invoicing for vendor supplies.

MRP takes the inventory into account and also the expected
receipt and issues during MRP run which is the vital data for
successful MRP.

MM with PP

• Staging of components for production order

• Receipt of finished products into the warehouse

MM with QM

• A movement type determines whether the material is

subject to QM or not.
 • Goods posted to QM stock if it is subjected to QM

MM with SD

• Availability check can be carried out on creating sales

order
• As soon as the delivery against the sales order is
created, that quantity is marked for delivery and
deducted from stock when performing post goods issue
(PGI) for delivery.

• Special sales order stocks can be maintained.

MM with PM

Goods movements are performed with respect to

• Equipment BOM
• Maintenance order
• With serial number management, serial number can be
entered with every serial number

MM with FI

• When posting the material movements, GL accounts

are determined through movement type and valuation
class information.

• Entire accounting entries are posted instantaneously

OK friends, having understood the over view of MM module;

let us try to look at what is there in store with this MM pack
for you.
For ease of learning and better understanding of MM module,
it is divided in to five topics as mentioned below.

• Enterprise structure

• Planning

• Master Data and PR

• Purchasing

• Inventory Management

To the each one of the above topic, complete configuration,

user manual and power point presentation is provided.

Configuration - Enterprise Structure: -

Define Plant
Define Storage Location
Assign Plant to a company
Define Purchase Organization
Purchase organization assignment
Defining material master field selection
Material Master Plant specific field selection
Define Material Type
Define number range for material type
Define Industry sector for material master.

Configuration - Planning:-

Complete configuration of Material Requirement

Planning
Consumption based planning

Configuration - Master Data and PR: -

Define system message attributes

Defining purchase value key
 Define payment terms
Define Inco terms
Define Account Group (Field selection for vendor
master)
Define number range for account group
Define purchasing groups
Define copying rules
Define Document types
Configure Release strategy for PR

Configuration – Purchasing: -

Define Document type

Define Number Range
Define tolerance limit for price variance
Release procedure for Purchase orders
Configure stock transport orders
Define Access Sequence
Define Condition Type
Define calculation schema
Define Schema determination
Account Determination

Configuration – Inventory Management: -

Define Plant Parameters

Define Field selection for goods movements
Movement type setting
Configure automatic storage location creation
Define screen layout
Define availability check for movement types
Configure negative stock
Define output determination
Configure stock determination
Configure split valuation
Getting into the Configuration area of SAP

BACKGROUND

There are two types of access to the user in SAP.

1. Easy access - used to access daily transactions

2. Project view or IMG – used to access for
configuration.

SAP Easy access is to perform the master data maintenance

and perform transaction. SAP configuration is to maintain the
backend settings according to the business requirements.

Access to each transaction is controlled by authorization.

Follow the steps explained here to get into the configuration
area in SAP.

INSTRUCTIONS

1. Type SPRO in the SAP main screen dialog box,

2. Click
3. Click on
4. Click appropriate node to look at more details.

When the menu path is mentioned as “IMG”, follow the

above steps.
Enterprise structure

Enter price structure describes the entire organization

details. Organizational details are broadly divided into the
two areas like financial area and logistics area.

Financial area deals with

 company code

 controlling area

 Currency and more.

Logistics area deals with

 Plant

 Storage location

 Sales organization

 Sales Distribution channel

 Sales Division etc.

Organ
Define valuation level

BACKGROUND

This configuration setting enables to define at which level

the stock are to be valuated in SAP.

Stocks can be valuated at following two levels in SAP.

 Plant level

 Company code level

It is recommended to keep at plant level. This is a client level

setting.

INSTRUCTIONS
Follow the Menu Path: IMG → Enterprise structure →
Definition → Logistics - General → Define valuation level

1. Click
2. Select the radio button

3. Click Save
Define Plant

BACKGROUND
This configuration setting enables to define the plant. Each
manufacturing facility or branch of a company is defined as
a plant in SAP.

Plant is assigned to the company code.

Storage locations are created under each plant.

If the valuation level is the plant, the stocks are valuated at

plant level.

Note: - It is common practice to copy plan from the existing

defined plant. It will be defined by the FI.

INSTRUCTIONS

Follow the Menu Path: IMG → Enterprise structure →

Definition → Logistics - General → Define copy, delete, check
plant

1. Click
2. Click

3. Click

4. Click

5. Enter from plant as 0001 to copy from SAP defined

plant

6. Enter To Plant – E.g. IND6

7. Click

8. Click to return to main menu.

Note: - Definition of plant and assignment of plant to the
company codes along with relevant GL accounts is done
by the FI team. However the creation of plant is
demonstrated.
Maintain plant details and Factory calendar in
Plant

BACKGROUND

When copying the plant, the entire details will be copied

from the source plant. Address of the plant and other
details attached to the plant can be changed.

INSTRUCTIONS

Follow the Menu Path: IMG → Enterprise structure →

Definition → Logistics - General → Define copy, delete, check
plant

1. Double click

2. Select plant IND6 by clicking the grey box in the left

side

3. Click

4. Click

5. Maintain the entire address, contact details of the plant.

6. Factory calendar must be attached to the plant

Below screen shows the details of plant settings.

Define Location

BACKGROUND

This configuration setting enables to define the location.

Location indicates where the materials are stored inside the
plant.

INSTRUCTIONS

Follow the Menu Path: IMG → Enterprise structure →

Definition → Logistics - General → Define Location

1. Click

2. Click

3. Update required and optional fields:

Field Name Description Value
Plant Name of the plant e.g. IND6
Location Location E.g. PROD
identification
Name Description of the Production location
location

4. Click

Note: - Maintain the address of the location in the

subsequent screen.
5. Enter title as Company

6. Enter country

7. Click

8. Click .
Maintain Storage Location

BACKGROUND

This configuration setting enables to define the physical

storage location. This will indicate where the stocks are
stored physically inside the plant.

Each item must have storage location. One material can be

stored in many storage locations.

Storage locations can be assigned to the warehouse through

warehouse management.

INSTRUCTIONS

Follow the Menu Path: IMG → Enterprise structure →

Definition → Materials Management → Maintain storage
location

Click

Enter the plant where the storage location is to be created.

E.g. IND6

Click
Click

Enter Storage location

Enter description of the storage location

Click

Select the storage location

Double Click

Enter the sequential number 1

Click
Select the sequence number

Click
Maintain the address.

Click

Click

Repeat the above to maintain the address for all storage

locations.
Maintain Purchase organization

BACKGROUND

This configuration setting enables to define the purchase

organization.

Purchase organization is the part of the enterprise structure

from MM point of view. It represents the responsibilities to

 Procure materials and services

 Negotiation with vendor

Purchase organization is assigned to the company codes and

plants. Following are the possibilities of assignments.

 One purchase organization to many company codes

 One purchase organization to one company code

 One purchase organization to one plant

Note: - It must be assigned to plant.

INSTRUCTIONS

Follow the Menu Path: IMG → Enterprise structure →

Definition → Materials Management → Maintain purchase
organization

1. Click
 2. click

3. Update the following fields

Field Name Description

Purch.organization Key identifying the purchase
organization. E.g. IND6
Purch.org.descr. Description of the purchase
organization. E.g. For plant
IND6

4. Click .
Assign Plant to company

BACKGROUND

This configuration setting enables to assign plant to the

company code.

INSTRUCTIONS

Follow the Menu Path: IMG → Enterprise structure →

Assignment → Logistics – General → Assign plant to company
code

1. Click

2. Select the desired company code by clicking the cursor

on it.

3. Click

4. Select the plant from the display

5. Click

6. Click .
Assign purchase organization to the company
code

BACKGROUND

This configuration setting enables to assign the purchase

organization to a company code.

INSTRUCTIONS

Follow the Menu Path: IMG → Enterprise structure →

Assignment → Materials Management → Assign purchase
organization to company code

1. Click

2. Select the desired company code by clicking the cursor

on it.

3. Click

4. Select the purchase organization

5. Click

6. Click
Assign purchase organization to plant

BACKGROUND

This configuration setting enables to assign the purchase

organization to a plant.

INSTRUCTIONS

Follow the Menu Path: IMG → Enterprise structure →

Assignment → Materials Management → Assign purchase
organization to plant

1. Click

2. Select the desired plant by clicking the cursor on it.

3. Click

4. Select the purchase organization

5. Click

6. Click

All right guys, not much about MM organization structure.

Now we shall look into material master related to
configurations.
Material Master

Material master contains all information about a material. All

the information have to be maintained by the different end
users.

Example:

 Physical, sales and storage related details of a material

is maintained by the logistics team

 Finance related information is maintained by the

finance team

 Quality related information is maintained by the QM

team

Ok, now let’s go to the configuration details of material

master.

Basic D
Assign field to field selection groups

BACKGROUND

This configuration setting enables to define the field in the

material master as mandatory or optional or to hide.

Let’s try to make the purchasing value key as mandatory

entry for plant IND6.

INSTRUCTIONS

Follow the Menu Path: IMG → Logistics – General →

Material master → Field Selection → Assign fields to field
selection groups

1. Click
2. Click in purchasing value key row
3. Create new field ref by copying from the standard SAP
entry. E.g. IND6 as field reference.

4. Click

5. Select the field selection as required entry

6. Click
Define plant specific field and screen selection

BACKGROUND

When there are more than one Bill Of Material, system will
select the first alternate by default.

It can be configured in such a way that system takes the

right alternate for a given period.

INSTRUCTIONS

Follow the Menu Path: IMG → Logistics – General →

Material master → Field Selection → Define plant specific field
selection and plant specific screen selection

1. Click

2. Maintain field reference as IND6 for plant IND6.

3. Click Save .
Define material type

BACKGROUND

Similar to the above alternate defining in production area,

for other areas like Inventory, MRP, Costing, Sales and
Distribution and Plant Maintenance can be maintained.

Only the menu path is given here and the rest of the settings
are similar to above 1.1.8.

INSTRUCTIONS

Follow the Menu Path: IMG → Logistics – General →

Material master → Basic settings → Material types → Define
Attributes of Material Types

1. Click

2. Select ROH by clicking the grey box in the left

3. Click to copy from ROH to the new material type

4. Type the new material type as YROH

5. Maintain the field reference as FERT

6. Select sales view

Note: - Standard settings are sufficient.

Field name Description

Field reference Field references are taken
from this material type.
X plant material status Cross plant material status to
restrict the usage of material
in all the plants.
Item category group Default item category group
to determine the item
category for the material
type.
Tick in this check box will
make the initial status of the
batch as restricted.
 Tick in this check box will not
check with the external
number range when creating
the material master.
Price control which will
appear in the material
master. However it can be
changed in the material
master.
Indicates that the Quantity
update in specific valuation
area.
Indicates that the value
update in specific valuation
area.

Double click

Select the check box only in the relevant valuation area. E.g.
IND6, IND7 and IND9

7. Click

8. Click

9. Click Save

Effect of this configuration setting with initial status

check box ticked.

When the new batch is created, the initial status of that

batch will be restricted.
Note: -

Considering the restricted batch for MRP will be controlled by

the IMG setting for MRP.

The batch status can be changed to unrestricted-use only

through manually or through the QI Usage decision.
Define Number range for each material type

BACKGROUND

This configuration setting enables to define the number

range for material type.

Each material type must have a number range so as to

enable to create the material of that type.

INSTRUCTIONS

Follow the Menu Path: IMG → Logistics – General →

Material master → Basic settings → Material types → Define
Number Range for Each Material Type

1. Click

2. Click

3. Click F6 or from the top, follow the menu path.

GroupInsert to insert the new group

4. Maintain the Text for the new group and maintain the
interval for internal and external number range
5. Click .

6. Click to assign to the material type

7. click on the material type from the Not assigned list

8. Click

9. Tick the group check box to which number range is to

be assigned to this material type

10. Click

11. Click .
Define industry sector

BACKGROUND

This configuration setting enables to define the industry

sector and field selection specific to the industry sector.

Industry sector definition is the one through which any

screen sequence can be changed. Industry sector is the
mandatory entry when creating the material master.

INSTRUCTIONS

Follow the Menu Path: IMG → Logistics – General →

Material master → Field Selection → Define industry sector
and Industry-sector-specific field selection

1. Click

2. Select the Mechanical engineering by clicking the grey

box in the left

3. Click

4. Maintain industry sector. E.g. Z

5. Maintain industry description. E.g. Mechanical

engineering-sp

6. Maintain field reference. E.g. IND6

7. Click

8. Click
Maintain user specific settings

BACKGROUND

This configuration setting enables to maintain the setting for

material master creation specific to the user.

By this way, users can be restricted from accessing certain

data.

INSTRUCTIONS

Follow the Menu Path: IMG → Logistics – General →

Material master → configure the material master → Maintain
User settings

1. Click

2. Click

Maintain the entries as shown below.

3. Click
 4. Click

Maintain the entries as shown below

5. Click

Effect of this configuration

When user sapuser6 try to create material master,

industry sector will not appear to him.
Set material block for goods movement

BACKGROUND

This configuration setting enables to define the block for

material. This is essential to prevent usage of same
material by different user at a given instance.

INSTRUCTIONS

Follow the Menu Path: IMG → Materials Management →

General settings for Materials Management

1. Click

2. Select the appropriate material block

Lock exclusively – when the material master is read during

the goods movement, plant data and accounting data are
locked till the material is posted.
Another user can not use this material at this time.

Late lock – data will be blocked only at the time of saving.

3. Click
Define storage location MRP per plant

BACKGROUND

This configuration setting enables to define the usage of

storage location stock during MRP run.

INSTRUCTIONS

Follow the Menu Path: IMG → Materials Management →

Consumption Based Planning → Planning → Define Storage
Location MRP per plant

1. Click

2. Enter Plant. E.g. IND6

3. Click
 4. Select 1 to exclude storage location from MRP

5. Click

6. Click to reach main IMG menu

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