SAP-MM Functional Overview

Contents

Invoice Verification/Valuation

Automatic Account Determination Overview and Org. Structure

Material Master

Purchasing Master Data Procurement

Inventory Management/ Valuation

NCPDM

NCPDM

(US National Committee on Physical

(US National Committee on Physical

Distribution Management)

Distribution Management)

:

:

"..physical distribution management .. is ..

"..physical distribution management .. is ..

the integration of one or more activities

the integration of one or more activities

for the purpose of planning, implementing and

for the purpose of planning, implementing and

controlling

controlling

the efficient flow of raw

the efficient flow of raw

materials, in-process inventory and

materials, in-process inventory and

finished goods from point of origin to

finished goods from point of origin to

point of consumption..."

point of consumption..."

Definition: Logistics

Resource Management in

Logistics

Capacity resources

Capacity resources

Capital resources

Capital resources

long-term short-termshort-term

Material resources

Material resources

Logistics chain

Logistics chain

Production

Production

Sales

Sales

Purchase orders Purchase orders

Procurement

Procurement

house househouseWare-

Ware-Customer Customer

Capital

Inventory management Invoice verification Invoice receipt

Overview of MM

?

Goods issue Transfer posting Material requirements planning External procurement Purchasing Internal procurement Production

Master data

Procurement Process

Order

Order processing

Order follow-up

Goods receipt and

inventory management

MM

Source

determination

Vendor selection

?

Invoice verification

_{Requirement determination}

Organizational structures in

R/3

Organizational units

Company

Controlling areas

Sales organizations Purchasing organizations

Company codes

Plants

Valuation areas

Invent. mgmt w/o warehouse

mgmt

Storage locations

Plants

0001

0002

0003

0001

0001

0002

Invent. mgmt with Warehouse

mgmt

Company codes

Valuation

Client

0001

0002

Company codes

Example for Valuation

RC

Plants

Mumbai

plant

Delhi

depot

VAL. AT CO.CODE

VAL. AT PLANT

125/ BAG

125/ BAG

125/ BAG

150/ BAG

Accounting

Company codes

Purchasing Organization

Plants

Company (Group)

Company codes

Purchasing

organizations

Organizational Entities in

Purchasing

Purchasing organization 1

Purchasing organization 2

Purchasing

organization

Material master record

Planned delivery time Purchasing group Batch indicator Valuation Valuation price Valuation procedure Valuated quantity Sales-specific data Delivering plant Sales texts Unit of measure Palletting instruction Storage location-specific data Storage time Stockfields

Forecast data

Consumption data

Manage-ment system data

Units of measure

Base unit: Piece

Box

(unit of issue)

Crate

Pallet

Material data maintenance:

accounting

Valuation class

MART Allowed values ROH 3000

3010 HALB 7920 HIBE 3000

Maintenance of material

data

Moving average price control:

Final delivered price (such as purchase order price) influences the valuation price

Purchasing Master Data

The vendor

Organizational levels of

vendor master record

General data

Purchasing

organization data

Company code

data

Company code

Vendor master record

Minimum order value

Accounting data Bank data

Payment transactions Account management

Valid

for the whole group

Valid

for one purchasing organization

Valid

for the whole group or for one company code

One-time

account

Account group

Type of number

assignment

Interval for number

assignment

Field selection

Account group

Enter invoice

Control account

Purchasing Master Data

Purchasing info records

USD

USD

Data in the purchasing info

record

Pricing

Records for condition type No valid record exists

Valid record exists

Pricing procedure RM000 Item 10 120 pcs PB00 Price $99 $100 for 1 pcs $99 for 100 pcs $98 for 200 pcs 1.Price PB00 2.Discount RA00 Access sequence: PB01 1. Outline agreement 2. Vendor/material/ organizational level 3. Vendor/material group/ organizational level Condition type: PB00 Access sequence: PB01

1

1

1

1

2

2

2

2

3

3

3

3

4

4

4

4

5

5

5

5

Scale

Conditions

Condition type

Calculation type

Scale basis

Price/quantity

scale

Pricing procedure

Purchasing Master Data

Source list

Source list

Procurement

External procurement

environment

Purchasing documents

RFQ

Purchase order

Quotation

A

B

?

Purchase requisition

Release order

Scheduling

agreement

?

Structure of a purchasing

document

. . . Purchasing document

ocument

ocument

Item category

Purchasing

document

Account assignment type

Purchasing

document

Procurement for stock

Production

Procurement for consumption

Material Purchasing document(s) Item: with account assignment category Vendor Goods receipt

Procurement

Consumption-driven

MRP

Requirements planning

Net requirements calc. Lot sizing Scheduling

Inventory

management

Material master

Purchasing

Forecasting

Materials planning and

control procedures

_Requirements

planning

Deterministic MRP

Consumption-based

Reorder point

procedure

Stochastic

Reorder Point Procedure

Replenishment lead time

Stock Lot size

Reorder level

Safety stock

Net Requirements Calculation in

the Reorder Point Procedure

Reorder level Purchase order Fixed planned orders Fixed purchase requisition

Purchase order proposal to the amount of

the lot size

Warehouse stock

Shortage

Comparison Comparison

Safety Stock and Reorder Level

Net Requirements Calculation in

Forecast Based Plng.

Fixed inward movements

e.g. purchase orders

Purchase orders proposals

Planned orders Purchase requisitions Lot size Warehouse stock Shortage Comparison Comparison Forecast requirements Safety stock

Lotsizing procedures

Part period

Static Lot-sizing

Procedures

Quantity

Time

Exact lot size

Exact lot size

Replenish to

Replenish to

maximum stock level

maximum stock level

Fixed lot size

Fixed lot size

Inward movements

Outward movements

Periodic Lot-sizing Procedures

Quantity

Time

Period length Period length

Inward

movements Outward movements

Dynamic Planning

Calculation

Req. x Price x Storage costs % x Time in storage

Storage costs =

100 x 365

Price :

$ 20

Lot fixed costs:

$ 100

Storage costs percentage :

10 %

Requirement

date

Req.

quantity

Lot size

Fixed costs Storage costs

06.07.1994

1000

1000

100

0

13.07.1994

1000

2000

38.36

20.07.1994

1000

3000

76.71

27.07.1994

1000

4000

115.07

Part Period Balancing

Req. x Price x Storage costs % x Time in storage

Storage costs =

100 x 365

Price :

$ 20

Lot fixed costs:

$ 100

Storage costs percentage :

10 %

Requirement date

Req.

quantity Lot size Fixed_costs Storage_costs Total storage_costs

06.07.1994 1000 1000 100 0 0

13.07.1994 1000 2000 38.36 38.36 20.07.1994 1000 3000 76.71 115.07 27.07.1994 1000 4000 115.07 198.78

Least Unit Cost Procedure

Req. x Price x Storage costs x Time in storage

Storage costs =

100 x 365

Price :

$ 20

Lot fixed costs :

$ 100

Storage costs percentage :

10 %

Requirement date

Req. quantity

Lot size Fixed costs Storage costs Total costs Unit costs 06.07.1994 1000 1000 100 0 100 0.10 13.07.1994 1000 2000 38.36 138.36 0.07 20.07.1994 1000 3000 76.71 215.07 0.11 27.07.1994 1000 4000 115.07 330.14 0.08 Optimum

Scheduling in the case of

external procurement

1

1

1

1

2

2

₂

₂

1

1

1

1

2

2

2

2

Forward scheduling

Backward scheduling

Replenishment lead time

Replenishment lead time

GR processing time

GR processing time

Today + 1 Purch. order

delivery date MRP delivery date t t Purch.order delivery date MRP delivery date Start / release date

The requirements planning

process

Purchasing

MRP

Planned order

Material requirements

planning

Planning mark-out

Purpose of the forecast

Reorder level

Safety stock

Forecast

Forecast requirements

VM

VV

Forecast

MRP type

Procurement

Purchase requisition

Department

MRP

Purchase requisition

processing

?

o.k.

Determine source of supply

Vendor

Release

Allocate and process

Purchase order

Procurement

Request for quotation/

quotation

?

Price comparison list

Vendor 1 Vendor 2

Requirements known. Procure from which source?

Entering an RFQ

?

?

Item list

1

1

1

1

2

2

₂

₂

Issuing output

Output

Reprint

Purchasing document

Reminder Rejection _Order

acknowledge-ment check

Processing Quotations:

Example

Enter price and pricing conditions

1

1

1

1

Rejection-Thank you for your offer. Unfortunately, we cannot place an order at this time ...

Vendor A Quotation for RFQ 1 Item 10 Gross price: 400/t Discount: $50 Vendor C Quotation for RFQ 3 Item 10 Gross price: 400/t Fixed costs: $40 Vendor A - Order -

Mat. Qty Price Steel 2t 350/t

Create info record or reject quotation

3

3

3

3

Quotation 1 Quotation 2 Quotation 3 Mean value quotation

Compare quotations using price comparison list

2

2

2

Procurement

Processing Purchase Orders

?

?

Contract

Pcs

%

$

Pcs

%

$

Info record

Vendor

One-time vendor

Contract

Contract

1

1

1

1

2

2

₂

₂

Scheduling Agreements

1

1

1

1

2

2

₂

₂

Inventory Management

Inventory management

Warehouse 1

Warehouse 2

Goods receipt

Goods issue

Old system

Vendor

_production

In-house

Consumption

Scrapping

Documents for goods

movements

Goods movement

Warehouse

Plant

Valuation area

Material valuation levels

Material Valuation Levels

Company code

0001

Split Valuation: Structure

V - price 4.00 _{S - price 6.00}Quantity 60

Valuation type Italy

Valuation type France

Updating the stock situation

Stock situation

On a quantity basis

Material master

Special stocks

Stock fields per

plant, storage location

and special stock

On a value basis

G/L accounts

Debits and credits

per company code,

period and, possibly,

Entering material

documents

Movement type

Material document item

Account determination

Consumption update

Quantity update

Indicator for printout

Field selection

Standard analyses

Analyses in inventory

management

Analyses

Stocks

overviews

Stock per material

Material

movement list

Inventory

control

Plant stock availability Reqs./stock list

Warehouse stock list

ABC-Analyses Stock value

Range of coverage Slow-moving items/ inventory turnover

Inventory Management

Processing Goods Receipts with Purchase

Order Reference

Purchase Order Views in

Inventory Management

Purchase order

Statistics

Determining the purchase

order during GR

Manuell

Goods receipt for

purchase order

Purchase

order

List of open purchase orders by - vendor

- material

- delivery plant Matchcode Manual

Stock types for goods

receipt

Account assignment object

Unrestricted-use stock

Stock in quality inspection

Blocked stock

Goods receipt blocked stock

Warehouse

Con

sum

ptio

_n

Vendor

Posting procedure for goods

receipt (example)

Stock account

Stock value

GR/IR clearing

Price differences

( ) ( )

Inventory Management

GR w/o Reference to a Purch.

Order or Production Order

Goods receipt

Preplanning

without purchase order without production order

Initial entry of stock balance Without purchase order

Without production order Goods receipt of by-products Delivery free of charge

Inventory Management

Transfer posting

Transfer posting

Stock transfer

Miscellaneous

transfer postings

From plant

to plant

From storage

location to

storage

location

From

material

to material

From QM to

unrestricted use

From

consignm.

stores to

warehouse

Valuation in the Case of

Stock Transfer

100.00

Expense / revenue from stock transfer

100.00 Standard-price 2.00 (a) (a) (b) (b) Moving average price 2.00 Standard-price 3.00 Any moving average price

Inventory Management

Goods issues

From warehouse

From consignment

stores

Sampling

Scrap

Consumption

Cost center

Asset

Sales

Order

Issue

Effects of goods issue

Material document

Accounting document

G/L account.

Stock account

Consumption account

...

Reservation

Order

Stock quantity

Consumption statistics

...

Point of consumption:

Cost center

Order

...

Warehouse mgmt:

Transfer order

Quality management:

Inspection lot

Goods issue

Posting method for goods issue

Stock account

Stock value

Consumption account

Special Stocks and Special

Procurement Types

❧

_Consignment

❧

_{Subcontracting}

❧

_{Stock Transfer with Stock Transport Order}

❧

_{Third party processing}

❧

_{Returnable Transport Packaging}

❧

_{Pipeline handling}

❧

_{Sales order stock}

❧

_{Project Stock}

Company’s Own

Special Stock

❧

_{Stock of material provided to Vendor}

❧

_{Consignment stock at Customer}

Company’s Own Special

Stock

Managed at plant level

_{Stock types}

❧

_{Unrestricted use stock}

❧

_{Quality inspection stock}

Externally-Owned

Special Stocks

❧

_{Vendor Consignment}

❧

_{Returnable Transport Packaging}

❧

_{Sales order stock}

Externally-Owned

Special Stocks

Managed at Storage

location level

Stock Types

❧

_{Unrestricted Use}

stock

❧

_{Quality inspection}

Stock

❧

_{Blocked stock}

Inventory Management

Physical Inventory

Procedures

❧

_{Periodic inventory}

❧

_{Continuous inventory}

❧

_{Cycle counting}

❧

_{Inventory sampling}

Physical Inventory

❧

Can be carried out for Company’s own stock and Special Stock

❧

Inventory for Company’s own stock and Special stock must be

taken separately in different physical documents

❧

Physical inventory can be taken for

Unrestricted-use stock in the warehouse

Quality inspection stock

Physical inventory

procedure

Create physical

inventory document

1

Set blocking

indicator

2

Physical

inventory document

4

Post differences

Batch-Input

Batch-Input

Arrange

recount

Change

count

6

5

3

5a

5b

Types of invoice

verification

?

Invoice verification

Goods receipt

or

or

----Invoice verification

environment

Posting an invoice

Purch. order history

Material master

Doc. No. 51000123

Variances

Tax

Company

Tax office

Vendor

Customer

Invoice receipt postings

Stock account

Stock value

( ) ( )

GR/R clearing

Input VAT

(control acct.)

Vendor

Price differences

Postings at Standard Price

Purchase order price 2.40 / pc Invoice price 2.20 / pc

Stock account ( 2 ) 200.00

Exp. / revenue Price difference ( 2 ) 40.00 20.00 ( 3 )

Vendor / general ledger 220.00 ( 3)

GR / IR clearing account ( 3 ) 240.00 240.00 (2)

Event Stock Total value Standard Moving av.

price price

( 1 ) Initial situation 100 200.00 2.00 2.00

( 2 ) GR for purch. order: 100 @ 2.40 200 400.00 2.00 2.20 ( 3 ) IR for purch. order: 100 @ 2.20 200 400.00 2.00 2.10

Postings at Moving

Average Price

Event Stock Total value Moving av. price

Exp.. / revenue Price difference 10.00 ( 6 )

( 1 ) Initial situation 100 200.00 2.00

( 2 ) GR for purch. order: 100 @ 2.40 200 440.00 2.20 ( 3 ) IR for purch. order: 100 @ 2.20 200 420.00 2.10 ( 4 ) GR for purch. order: 100 @ 2.40 300 660.00 2.20

( 5 ) Goods issue: 250 @ 2.20 50 110.00 2.20

( 6 ) IR for purch. order: 100 @ 2.20 50 100.00 2.00

Raw material consumption ( 5 ) 550.00

GR / IR clearing account ( 3 ) 240.00 240.00 ( 2 )

240.00 ( 4 ) ( 6) 240.00

Vendor / general ledger 220.00 ( 3 ) 220.00 ( 6 )

INVOICING PLANS

Facility to schedule Invoicing dates for planned

procurement independent of goods and service receipts

Periodic Invoicing Plan

Account Determination Procedures for

Automatic Postings in MM

Types of Account

Determinations

Movement Type based Transactions SDSD MMMM PPPP QAQA PMPM HRHR FIFI COCO AMAM PSPS WFWF ISIS R/3- Client/Server ABAP/4 R/3- Client/Server ABAP/4 SDSD MMMM Non-Movement Type based Transactions Cond. Technique

Grouping Organizational Levels

for Account Determination

Valuation grouping

code Plant Company code

Case: valuation area = plant

Chart of accounts 0001 0001 0003 0003 0002 0002 0001 0001 0004 0004 0005 0005 0003 0003 0002 0002 0003 0003 0004 0004 0002 0002 IKR IKR 0001 0001 GKR GKR

Grouping of Material Type -

Valuation Class

class Account category reference Material type FERT HALB HAWA . . . ROH1 ROH2 ROH3 . . . 0001 0002 0003 0004 7900 3000 3010 3020 3030 3040 3100 3200

Grouping of Materials for

Account Determination

Option 1:

Option 2

Option 3

ROH

ROH

HIBE

ROH

HIBE

FERT

FERT

Procedure Part 1: Value String

- Processing Keys

Transaction

Inventory Management

Invoice verification

Value String

(Generalized

posting record)

BSX

BSX

Processing keys

Processing keys

G/L account number

G/L account number

WRX

WRX

191100

191100

300100

300100

425000

₄₂₅₀₀₀

KBS

KBS

Procedure Part 2: Processing

Key - Rules

Transaction

Processing keys

for debit/credit posting

Parameters on which

account allocation

depends

1

Processing Key

(Transaction)

Chart of accounts

Rules

2

Procedure Part 3: Rules -

Account Allocation

Rules specify

account determination

key

(Valuation grouping

code)

(Account grouping

code)

(Valuation class)

Account

number

Processing Key

(Selection of

transaction)

Selection of

chart of accounts

Account Determination

Procedure: Overview

Legend

Information derived from Transaction type Information derived from Material Master

Information derived from the organiz. Structure

Main Customizing area Movement type based Transaction "Type of Material" Step 1 or 2 Material Type Plant Value

Posting String Posting StringQty.

Step 3 Processing Key (GBB) Company Code Chart of Account Valuation

Class Val. Grouping_Code

Rules Step 4 G/L Account Account Categ. Reference Material Master Type of Transaction Non-move-ment type based

Transaction

Account modification

Processing Key (AUF)

Automatic Posting:

Maintenance of the Settings

Selection of the

valuation grouping code

1

Selection of the posting transaction

2

Allocation of the G/L account number(s)

per valuation class

(and account grouping code)