SAP MM Organizational Structure

In the SAP ERP, several structures can be used to represent the legal and organizational structure of the company.
Organizational elements can be structured from the point of view of accounting, human resources and materials
management. It is possible to combine these structures. The organizational structures form a framework in which
all business transactions can be processed.

Following organizational units represents MM (Materials Management) module:

 Company Code
 Plant
 Storage Location
 Purchasing Organization
 Purchasing Groups

Chart of SAP MM Enterprise Structure

Graphical Representation of SAP MM Organizational Structure

Client

From a business viewpoint, the client could represent a corporate group. The client is the highest hierarchical level
in the SAP system. A client is considered synonym for a group. Creation of client in SAP is a technical requirement.
It is the highest node or the hierarchy of the enterprise or organizational structure in SAP. Several company
codes can be maintained within a client.
Company Code

Company code is SAP is the organizational unit which is the created in Finance (FI) module and the same is linked
with Materials Management module. Strictly speaking it does not belong to SAP MM organizational structure.
Company code represents an independent company. Company which is a legal entity and statutory requirement is
to maintain a separate balance sheet. Profit and loss statement are created and maintained at the company code
level.

In a scenario where the model is that a corporate group or group of companies are carrying out their businesses in
different sectors of economy, every company by law is a legal entity which is liable to maintain separate book of
accounts. All books of accounts are maintained at the company code level.

Plant

Plant in the SAP system is a broad term which has a varying definition when different logistics modules come into
discussion.

 In Materials Management (MM) module, a plant is referred to as a facility where the material stock is kept,
stored and inventory is maintained.
 In Production Planning (PP) module, a plant is referred to as a production facility where the production of
goods is done.

Storage Location

Storage Location is an organizational unit in logistics which is assigned to a plant where the stock is kept and
inventory is managed. Storage Location can be characterized and vary based on their properties like Raw Material
Storage Location, Finished Goods Storage Location, Spares Storage Location, Returns Sales Storage Location,
Temperature Controlled Storage Location, etc.

Purchasing Organization

A purchasing organization is responsible for all purchasing activities within a company and is responsible for
handling procurement activities and documentation such as RFQ, contracts, purchase orders, etc. In simple words,
a Purchasing Organization is an organizational unit in SAP Materials Management which is responsible for
purchasing and carries out procurement activities on behalf of the company.

Purchasing Group

The final unit of SAP MM organizational structure that we need to discuss is Purchasing Group. A Purchasing Group
represents an individual or a group of individuals, not necessarily in procurement department, who are responsible
of carrying out purchasing activities. This is usually used for reporting purposes, as well as approval procedure
(release strategy) for Purchase Requisitions (PR), Requests for Quotation (RFQs), Purchase Orders (PO), Contracts,
etc.
You can describe a Purchasing Group as a group of purchasers responsible within a purchase organization to
procure a specific type of material and/or service.

ME11 – Create a Purchase Info Record

Step 1. Enter Transaction Code ME11 in the command Bar. For creating the info
record you need to Enter a combination of Vendor and Material in the first screen
of Transaction Code and then enter purchasing organization and Plant.
And next, You have to choose an info category for desired procurement type and
Press ENTER for the next screen.

Step 2. In the next screen, First, understand the meaning of each field and the
purpose of these values which you are going to enter in input each field.
Reminder 1, 2, 3: These three fields indicate remainders to be issued to the vendor
Vendor mat. No: A material number that is used by the vendor for this material.
Vendor material group: material group used by the vendor for this material.
Salesperson: Name of the contact person.
Telephone: phone number of contact person or vendor
Return agreement: this can indicate if goods return is available and if there are
refunds available.
Order unit: unit in which this material is ordered by the vendor.
Certificate category: type of certificate issued by the vendor that applies to this
material.
Country of origin: country in which this material is produced.
Step 3. After entering all desired data, we will click on the button “Purch.
Org. Data 1″ to be transferred to the screen for entering Purchase Organization
dependent information.

Step 4. Now fill all the mandatory input fields in the next screen for Purchase
Organization Data1.
Planned delivery time: Default time in days in which the material delivery is
planned.
Purchasing group: Purchasing group is mentioned in material master lessons.
Standard quantity: Standard purchase quantity for the material.
Minimum quantity: Do not allow procurement of a quantity less than stated here.
Maximum quantity: We do not want to purchase more than this quantity at a
time.
Net price: Net Price of material per procurement unit.
Incoterms: Trading and delivery terms.
Step 5. Now press Enter and Save document purchase info record is created.

Stock transfer
The stock transfer is nothing but transferring of materials from one
plant to another storage location, from plant to plant, plant of
company code to plant of another company code. When the stock
transfer happens between plants, then the quantity changes in both
plants.

Transfer posting is a removing of materials from one plant and

moving to another plant or location. Examples of transfer postings
are as follows.
1. Postings from material to material, plant to plant
2. Transfer posting from valuation type to valuation type
3. Release the quality inspection stock that is moving the stock to
unrestricted use in SAP

Difference between stock transfer and transfer posting

The difference between stock transfer and transfer posting are as
follows
Stock Transfer Transfer Posting
1. Stock transfer is a physical
movement of goods and it is a 1. Physical movement of goods are
mandatory options in transfer posting
2. Stock transfer consists of goods 2. Special Stock into Company Stock
issued from the shipping point & a & transfer of stock from one plant to
goods receipt in the receiving point. another plant
3. Movement types are 301 – Plant to
3. Movements types are 641- plant, 309 – Material to material, 311
shipping, and 643 – Cross company. – Storage location to storage location.
4. Transaction code – ME27, ME21 4. Transaction code – MB1B
How to Create Split Valuation in
SAP MM
Sometimes needs to evaluate the various stocks in a particular valuation area
individually for some specific
materials for the company. Material valuation helps in determining the price of the
material and it can happen at the company code level or plant level.
It can be evaluated based on different types of procurement which are known as
split valuation.
The reasons behind this are as follows:
Different origins of the material
Different grades of quality for the material
Different statuses for the material
Differentiation between in-house production and external procurement
Differentiation between different deliveries
Please follow the below mentioned steps for Split Valuation in SAP MM.

Steps for Activation of split valuation in SAP MM:

Step 1: Execute the Transaction Code SPRO.
Step 2: Follow the paths – >
Material Management – >
Valuation and Account Assignment – >
Split Valuation – >
Activate Split Valuation
Click on “Activate Split Valuation” as mentioned above snapshot.
Step 3: Next, select a first Radio button and Save the changes. (Split Material
Valuation Active)

Steps for Configure Split Valuation in SAP MM:

Step 1: Follow the SPRO paths to do the Split Valuation as mentioned below.
Execute the transaction code SPRO in the command bar.
Path – > Material Management – >
Valuation and Account Assignment – >
Split Valuation – >
Configure Split Valuation
OR Execute the Transaction Code ONWC in the command bar.

Step 2: Click on Next Entry on the below pop screen.

Now press the Back button twice

OR Execute Transaction Code OMWC again to create Global Category.
Step 1. Click on Global Category

Step 2. Click on Create tab to create a Valuation Category

Step 3. Give Valuation Category and description as required on the below
screen.
Then click on the “Create” button.
You can see the message “Valtn Category H was/were created”
Then press the Back buttons.
Step 4. Select the Valuation Category and click on “Types->Cat.” Tab.

Now, activate all valuation types which you have created by clicking
on Activate button on the below screen.
Step 5. Click on the Cat->OUs tab on the above screen.
Now Select the Plant and press Activate button below the screen.
You can see Active in the Status field.
Then Press the SAVE button.
In this way, we have activated split valuation for in-house production & externally
procured materials.

Step 3: Click on Global Types to create global types on the below pop screen.
Step 4: Now, click on Create Icon to create a new valuation type on the below pop
screen.

Step 5: Now, Enter the required details as mentioned below on below pop screen.

Fill in the required data for the above fields for the External Valuation type:
Valuation type
Int. Purchase Orders
Acct cat. Reference
Then click on the Save button.
Step 6. Again click on Create tab to create in House Valuation type.
For in House Valuation type, fill the below details.
Valuation type
Int. Purchase orders
Acct cat. Reference
Then click on Save.

Now press the Back button twice

OR Execute Transaction Code OMWC again to create Global Category.
Step 1. Click on Global Category

Step 2. Click on Create tab to create a Valuation Category

Step 3. Give Valuation Category and description as required on the below
screen.

Then click on the “Create” button.

You can see the message “Valtn Category H was/were created”
Then press the Back buttons.
Step 4. Select the Valuation Category and click on “Types->Cat.” Tab.
Now, activate all valuation types which you have created by clicking
on Activate button on the below screen.

Step 5. Click on the Cat->OUs tab on the above screen.

Now Select the Plant and press Activate button below the screen.
You can see Active in the Status field.
Then Press the SAVE button.
In this way, we have activated split valuation for in-house production & externally
procured materials.

MM17 – Mass Maintenance

of Material Master in SAP
How to do Mass Maintenance of Material Master in SAP
using MM17

Steps 1. Do the following steps mentioned below.

A. Enter transaction MM17
B. Select the data type you need to change, for example, we need to change a field
in general data.
C. Execute.
Step 2. Enter the Material range for which you want to change and execute it.

Step 3. When you are clicking on the red mark button shown below – you will
get a Selection fields screen on the left side. Check the appropriate field (we are
changing the base unit of measure for our two materials) and then click on the
arrow pointing button to add the selected field to be changed and then click the OK
button.

Step 4. Now, We are at the next screen where we can input our value to be
transferred. Enter the value you want to copy in the box. Click on the column
heading. Select the button, to overwrite the old values by “kg”.
Now your settings are saved, and your material master data is changed.