MM Cookbook
MM Cookbook
MM Cookbook
Determination of Requirements
The user department responsible is manually passing a requirement for materials to the
purchasing department via Purchase Requisition. Purchase requests are generated when
business runs the MRP and Request are also generated based in Consumption based planning
(CBP) for Production and Engg.Stores.
The purchasing component helps the buyer determine the sources of supply. User use the
determination of the source of supply to create Requests for quotation (RFQs) and then to enter
quotations. User is accessing the existing Purchase Orders and Conditions in the System.
The System is capable of simulating pricing scenarios and simplifies the selection of vendors by
making price comparisons between the various quotations.
The purchasing system adopts information from purchase requisition and the quotation to help to
create Purchase Orders. They are also creating manual purchase order directly for stock, non-
stock items, services etc.
The buyer monitor the processing status of the purchase order online at any time and determine
whether goods or an invoice have been received for the relevant purchase order item.
The Goods receiving requester confirms the receipt of the materials by simply entering the
Purchase Order Number. The system compares the goods receipt quantity with the purchase
order quantity. By specifying permissible tolerances, buyers can limit over deliveries and under
deliveries of ordered materials.
PURCHASING
BACKGROUND
This configuration setting enables to define at which level the stock are to be valuated in SAP.
Plant level
Company code level
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.
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
7. Click
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.
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
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:
6. Enter country
7. Click
Click .
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.
INSTRUCTIONS
Click
Enter the plant where the storage location is to be created. E.g. IND6
Click
Click
Click
Select the storage location
Double Click
Click
Click
Maintain the address.
Click
Click
Repeat the above to maintain the address for all storage locations.
BACKGROUND
Purchase organization is assigned to the company codes and plants. Following are the
possibilities of assignments.
INSTRUCTIONS
1. Click
2. click
BACKGROUND
1. Click
3. Click
5. Click
6. Click .
BACKGROUND
This configuration setting enables to assign the purchase organization to a company code.
INSTRUCTIONS
1. Click
3. Click
5. Click
6. Click
BACKGROUND
INSTRUCTIONS
Follow the Menu Path: IMG Enterprise structure Assignment Materials
Management Assign purchase organization to plant
1. Click
3. Click
5. Click
6. Click
All right guys, not much about MM organization structure. Now we shall look into material master
related to configurations.
Definition:-
Every vendor is identified with the code in SAP. It is called Vendor master record.
Address
Payment terms
Delivery terms
Lead time to supply
GL Account for reconciliation
Each vendor record will be created at company code and purchase organization level.
Normally vendor master contains the details of both accounts related and also purely purchasing
related, hence it is created in consultation with FI team.
Menu Path:-
Maintain
Maintain
Maintain
Maintain
Click
Nothing specific to be maintained in this screen
Click
Maintain the payment related details.
Click
Maintain the reconciliation account. E.g. 160000
Click
Maintain more FI related information here.
Click
Dunning data are maintained here.
Click
Maintain order currency, terms of payment, Incoterms
Click
Click
Click
Definition:-
Purchase request is the requirement document created manually or through the MRP run.
Purchase request is further processed to create Purchase order document.
Menu Path:-
Click
Click
Click to enter material number and quantity
Click
Click
Click
Definition:-
When the quote is received from the vendor, with reference to the request, quote can be
maintained.
Quotation is the reply from vendor for our enquiry regarding the price and quantity and supply
schedule confirmation.
Let us maintain the quotation for the RFQ 6000000007.
Prerequisite:-
Menu Path:-
Click
Click
Click
Click
Note: - To compare the price from various vendor, use transaction code ME49 – price
comparison
Definition:-
Purchase info record is the kind of template with all the information required to create purchase
order. For each vendor, material and plant combination purchase info record can be created.
Standard PO
Sub contracting
Consignment
Pipeline
When creating PO, most of the information will be copied from info record into PO.
Menu Path:-
Maintain Plant
Click
Maintain the following fields according to the business needs
Click
Maintain planned delivery time
Click
Click
Note: - Text maintained in purchase order text will be copied into the PO.
Click
Condition type specific to this vendor and material can be maintained here. It will be copied into
the purchase order
Click
Definition:-
Source list is used to find the vendor automatically during auto vendor assignment process. It is a
plant specific master data.
Menu Path:-
Maintain Plant
Click
Note: - field is used incase of STO. Supplying plant can be mentioned here.
Note: - Only one vendor can be indicated as preferred vendor in the same validity period.
Click
Click
Definition:-
Purchase request is the requirement document created manually or through the MRP run.
Purchase request is further processed to create Purchase order document.
Menu Path:-
To view more details, click the item details tab screen one by one.
Click
Click
Click
Click
Click
click
Note: - Maintain the required text here
Click
Click
Definition:-
There are three types of main material movements in SAP. They are
Goods Receipt
Good Issue
Transfer Posting
Through MIGO transaction entire above three types of transactions can be performed. There are
many options with MIGO transaction code.
Example receiving goods with reference to PO, customer returns, from production. When goods
are received, inventory will be increased and relevant other documents will be adjusted.
During the material movement, material document is generated for all movements. Relevant
accounting and controlling documents are also created for relevant movement types.
Menu Path:-
details .
To look at the other possible entries click . Other possible entries are
Enter the purchase order number and serial number as shown below.
Note: - PO can be selected from the left side display. Left side display will show the past
purchase orders used. To select from left side display, double click on the required PO.
Click
Note: - as soon as pressing the key display of purchase order in the above box where we
mentioned the PO will disappear.
Click
Click
Click
Click
Click
Note:-
If the item is batch managed and the items under one delivery note with different batches are
received, quantity can be split into according to the batch size by pressing
Contract is an agreement between the vendor and the company to supply goods and services as
per the agreed terms and condition.
At the time of negotiating, it may not be clear as of how much is required and when it is required.
In such a situation, an open contract can be released on the vendor.
Every contract must be followed by a release order which is nothing but a normal PO with
reference to the contract.
Contracts can be release centrally or with specific to plant. In case of multiple plants, central
contract can be released and release order specific to each plants can be released.
Menu Path:-
Click
Click
Enter material code and target quantity. E.g. STJRM001 and 10000 respectively
Select the item
Note:- Condition which are already maintained in the info record only appear here. If required add
discount condition type manually.
Definition:-
Purchase order is an agreement between the vendor and a company to supply the goods at an
agreed rate and at an agreed duration of interval.
Purchase order is a legal document between a vendor and a company. It covers the payment
terms and terms of delivery also.
Scheduling agreement is one of the purchase order types. It defines the agreement between
vendor and the company similar to the PO. For every scheduling agreement, delivery schedule is
a must to indicate the supply schedule.
If scheduling agreement exist, MRP can automatically create the delivery schedule.
Let us create the scheduling agreement with vendor IND6-1 for material STJRM001.
Menu Path:-
Logistics Materials Management Purchasing Outline Agreement Scheduling
Agreement Create ME31L – Vendor Known
Click
Note: - Scheduling agreement is used where the rate is fixed over the period of time without any
changes.
Click