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What is Split Valuation ? What is it Necessary ?

Split Valuation allows substocks of the same material to be managed in different stock accounts. This allows substocks to be valuated separately, and every transaction is carried out at the substock level. So, when processing a transaction, it is necessary to mention the substock. The split valuation is necessary if the material has: Different Origins Various Levels of Quality Various Statuses It is also required in situations where you need to make a distinction between in-house produced materials and materials procured externally, or if there is a distinction between different deliveries. A Basic Overview of Stock Valuation Methods There are three methods with which you can revaluate your stock for Balance Sheet purposes.Irrespective of the method you select, you will be able to valuate your stock either at the Company Code level or at the Valuation Area level: 1. LIFO (Last-In-First-Out): This method is based on the assumption that the materials received last were the ones issued/consumed first. The valuation is based on the initial receipt. 2. FIFO (First-In-First-Out): Here the assumption is that the materials received first are the ones consumed/issued first. So, the valuation is based on the most recent receipt. The FIFO method can also be used in conjunction with the lowest value method. By this you can determine whether the system should make a comparison between the FIFO determined price and the lowest value price. You can also determine whether the FIFO price should be updated in the material master record. 3. Lowest Value Method: Here, the stocks are valued at their original price or the current market price whichever is lower. This method is suitable when the inventory needs to be valued to take into account material obsolescence, physical deterioration, or changes in price levels. SAP MM Requirements for Setting up Plant In SAP MM materials management, Plant represents a location where valuated stocks are maintained. In other cases, plant can also be looked at as a location for maintaining or servicing. Transaction code OX10 can be used to define a plant in SAP. However, SAP MM requires certain pre-requisites before a plant can be defined in SAP. The three maiin requirements for configuring plant are country keys, factory calendar and region keys. Country Key The SAP system comes preinstalled with country keys, however if country key does not exist for the clients country, the same will need to be defined.

Factory Calendar The second requirement before defining a plant is configuration of a factory calendar. The factory calendar contains the workdays, public holidays, and company holidays. Even though the system has pre-defined factory calendars, these are required to be tailored based on the needs of the customers. Region Keys Region keys are similar to country keys, however, the region keys identif the province associated with the country. All the above three criteria needs to be configured in the system before a plant can be configured. The menu path to define a plant in the system is available through: IMG >> Enterprise Structure >> Defintion >> Logistics >> General >> Define, Copy, Delete, Check Plant. Migrating Material Master into SAP This document will discuss loading Material Master data using the standard load program RMDATIND and provides a simple guide in how to overcome the common problems in migrating Material Master into SAP. Load methods ( Standard load program RMDATIND, BDC recording of transaction MM01, BAPI object type BUS1001006) Data structures in the Material Master load program RMDATIND (BMM00, BMMH1, etc) Common Problems ( Legacy Material Number, Duplicate Materials, Alpha conversion, Taxes, Multiple Plants, Units of Measure..)

Definition and Configuration of Split Valuation in SAP Though known by many users, Split Valuations functionality is not known well by everyone. Split Valuation allows substocks of the same material to be managed in different stock accounts. This allows substocks to be valuated separately, and every transaction is carried out at the substock level. So, when processing a transaction, it is necessary to mention the substock. Split valuation requires that you have the Materials Management and Finance modules implemented. It also helps management accountants to get accurate information of actual value and and cost of particular stocks. The split valuation is necessary if the material has: Different Origins Various Levels of Quality Various Statuses Difference between delivery times It is also required in situations where you need to make a distinction between in-house produced materials and materials procured externally, or if there is a distinction between different deliveries. Activate Split Valuation Split Valuation is set active by default in the SAP Standart System. Somehow if it is not active, you can activate it through SPRO >> IMG >> Materials Management >> Valuation & account assignment >> Split Valuation >> Activate

Configure Split Valuation In split valuation, you can distinguish between partial stocks of a material according to certain criteria and valuate them separately.The material stock is divided according to valuation category and valuation type: The valuation category determines the criteria for distinguishing between stocks The valuation types describe the possible features of the partial stocks. You can refer to sapficoconsultant free sample Split Valuation Configuration document for further steps and details. How does Split Valuation Affect in your System Every processed valuation relevant transactions as goods issue, goods receipts or physical inventory are executed at the level of partial stocks. It must be always specified which partial stock is affected and so other remaining partial stocks are unaffected. Total stocks are also updated by this way.The value of the total stock is calculated from the sum of the stock values and the stock quantities of the individual partial stocks. For more references to understand better Split Valuation visit, Understand the Split Valuation functionality with a given real life example Step by step procedures of Split Valuation for Materials An introduction to Split Valuation Step by step Configuration of Split Valuation with screenshots

Transaction Keys in Materials Management Also known as process keys, the Transaction Keys are pre-defined in the system to enable transaction postings in Inventory Management and Accounting (Invoice Verification). For each of the movement types in MM, there is a value string that stores these possible transactions. The pre-defined transaction keys are: BSX (used in Inventory Postings) WRX (used in GR/IR Clearing Postings) PRD (used to post Cost/Price differences) UMB (used to post Revenue/Expenses from revaluation) GBB (used in offsetting entries in Stock postings) BSX, WRX, and PRD are examples of transaction keys that are relevant for a GR with reference to a purchase order for a material with standard price control. The transaction key UMB is used when the standard price has changed and the movement is posted to a previous period. Likewise, GBB is used to identify the GL account to post to as the offsetting entry to the stock account (when not referencing a purchase order) such as miscellaneous goods receipts, goods issues for sales orders with no account assignment, and scrapping. MRP vs Consumption-based Planning MRP and Consumption-based planning are two fundamental SAP planning types that can be used to determine a products requirements. To avoid any confusion on the subject: I am not talking about the MRP run that is executed through MD01 and MD02. Im talking about planning types that are set in the Material Masters MRP1 tab. The MRP type is used in the MRP run to determine HOW procurement and/or production quantities are calculated.

MRP When you plan a material according to MRP logic it means that its requirements (i.e. how much of this product do I need in the future) are dependent on: independent requirements determined by a Sales and Operations Planning process (S&OP or SOP), or; Dependent requirements coming from another material of which the material in question is a component (part of BOM) The key-word here really is: dependency. The dependency of one materials future demand to requirements determined elsewhere. MRP is commonly used in a production environment. Consumption-based planning When you plan a material according to Consumption-based planning logic, the future demand of the product is always determined by its historical demand. In SAP there are two ways to approach this: Forecast-based planning: on the basis of historical demand you estimate future requirements and you procure according to this estimate. This is suitable for materials that are sold or produced with higher volume. Only then a decent statistical forecast makes sense. Re-order point procedure: when your stock falls below a pre-determined stock level the system issues a procurement proposal. This is generally applied to low-volume or bulk materials. Forecasting on low-volume materials is too error-prone. Forecasting low-volume materials will result in unreasonably high safety stocks (I will blog on the relationship between forecasting and safety stock in the future). The key-word here is: independency. The materials requirements are determined independent of another material or process. Consumption-based planning is commonly used in a wholesale environment, but also in a production environment for some raw materials, additives and bulk materials. Similarities A Sales and Operations Planning process is, like forecast-based planning, also based on forecast. The fundamental difference in comparison with forecast-based planning (a Consumption-based process) is that: In SOP a materials sales forecast is based on aggregated historical demand for multiple materials in a product-group or a sales-region. The aggregated sales forecast is then manipulated by the production department for capacity reasons. The final aggregated forecast is then spread over the individual materials according to a distribution logic (10% to product X, 8% to product Y, etc.). In Consumption-based planning the forecast is always based on the materials own historical demand. There is no-one in the process that manipulates the numbers.

SAP MM Study:Physical Inventory Your enterprise has to carry out a physical inventory of its warehouse stocks at least once per fiscal year to balance its inventory. Various procedures can be implemented for this.

In a periodic inventory, all the enterprises stocks are physically counted on the balance sheet key date. Every material has to be counted. During counting, the entire warehouse must be blocked for material movements. In the continuous inventory procedure, stocks are counted continuously throughout the entire fiscal year. In this case, it is important to ensure that every material is physically counted at least once during the fiscal year. You can also implement special procedures, such as cycle counting (physical inventory at regular intervals) and inventory sampling (physical inventory of randomly selected stocks). Physical Inventory types: Periodic; Sampling; Continuous; Cycle Counting With both continuous and periodic inventory types, the following stock types can be included in the physical inventory: -Unrestricted use stocks in warehouse -Quality inspection stocks -Blocked stock The cycle counting inventory method creates a physical inventory document only for stock type 1 (unrestricted use). The inventory sampling procedure is only applicable to stock types 1 (unrestricted use) and 2 (quality inspection stocks). The Physical Inventory Process Create physical inventory document->Set blocking indicator->Print physical inventory document->Enter count results->List of differences->Post differences Physical Inventory Number: The physical inventory number was created as an additional hierarchy above the physical inventory document number. You can use it to group together different physical inventory documents that belong together organizationally. You assign physical inventory numbers when you create and change physical inventory documents, and you can use them as an extra selection criterion for physical inventory reports. This enables you to directly display the physical inventory documents per storage location, customer, or vendor. If you have not finished entering the complete physical inventory count, you can freeze the book inventory balance in the physical inventory document to prevent goods movements from changing the book inventory balance relevant to the physical inventory count, which would result in incorrect inventory differences. You define in Customizing for Inventory Management whether you can freeze book inventory balances in the storage location.

When entering a physical inventory count with reference to a physical inventory document that contains many items with a quantity of zero, you can set zero count automatically for all items that have not yet been counted. In Customizing for Inventory Management, you can define the following value tolerances for posting inventory differences for a user group: maximum amount per physical inventory document maximum amount per document item Relevant tables: IKPF: Header: Physical Inventory Document ISEG: Physical Inventory Document Items 31 Steps to Purchasing Management Contents: Step 1: Define a Company Step 2: Define Company code Step 3: Assign Company code to Company Step 4: Define a Plant Step 5: Maintain Purchasing Organization Step 6: Maintain Storage Location Step 7: Assign Plant to Company code Step 8: Assign Purchasing organization to Plant Step 9: Assign Purchasing organization to Company code Step 10: Material Master Step11: Create Vendor Accounts Group Step12: Create Number Ranges for Vendor Accounts Step 13: Assign Number Ranges to Vendors Accounts Group Step 14: Cerate Vendor Masters Step 15: Source of Supply: Purchasing Info Records Step 16: Changing an Info Record Step 17: Net Price Simulation Step 18: Out line Agreements: Contracts: Step 19: Schedule Agreement Step 20: Outline Agreement: Display, Change, Cancel and Block Step 21: Optimized Purchasing: Source determination Step 22: Creating Purchase Requisition Step 23: Assign and Process of Purchase Requisition Step 24: Creating Purchase Requisition W/O Master Record Step 25: Change in Purchase Requisition Step 26: Simplified Procurement process (ERS) Step 27: Creating Purchase Orders Step 28: Displaying a Purchase order Step 29: Goods Receipts

Step 30: Run the Settlement Program Step 31: Vendor Evaluation What is EAN? The EAN (International Article Number), equivalent to the UPC (Universal Product Code) of the United States, is an international standard number for identifying a material, which SAP allows you to assign (done in the Eng./Design or Units of Measure screen) to the materials. The EAN is normally assigned to the manufacturer of a material. Made up of a prefix (to identify the country or company from where the material originates), article number, and a check digit (ensures correctness of an EAN number so that no incorrect entries are scanned or entered into the system). MRP Processing Keys NETCH, NETPL and NEUPL are three fundamentally different ways to schedule your MRP run: NETCH Net Change Planning NETPL Net Change Planning within Planning Horizon NEUPL Regenerative Planning SAP is keeping track of changes that are relevant for planning a material (like sales order entry, purchase order entry, stock release, etc.). A planning relevant change signals to MRP that the material should run in the next NETCH or NETPL MRP run. MRP will thus only process those materials that underwent some type of planning relevant change. This can decrease processing time of the MRP background run when compared to processing ALL materials.

I will elaborate on these three options and their workings: SAP is keeping track of changes that are relevant for planning a material (like sales order entry, purchase order entry, stock release, etc.). A planning relevant change signals to MRP that the material should run in the next NETCH or NETPL MRP run. MRP will thus only process those materials that underwent some type of planning relevant change. This can decrease processing time of the MRP background run when compared to processing ALL materials. The difference between NETCH and NETPL is the planning horizon. In NETPL, if a change occurs outside the planning horizon (e.g. a sales order is entered 2 months away and your planning horizon is 6 weeks), then the material is not included in MRP even though there is a change. Be careful with this, because that same sales order is not recognized as a new requirement when it will shift within the planning horizon as we move towards the future. Regenerative planning (NEUPL) disregards the fact whether or not planning relevant changes were made to the material. It will process ALL materials (with an MRP relevant planning type in the material masters MRP1 tab).

Another element worth mentioning is the processing indicator. You can use the processing indicator in the stock/requirement list or MRP list to indicate that you checked the material. You can use a filter in the collective access transaction MD06 so you only have to review unprocessed materials (the materials that you didnt check yet).

MD06 - Processing Indicator

MD06 Filter Processing Key

Planning background MRP jobs Background scheduling of MRP jobs is done through program RMMRP000 (SE38). This screen is similar to transaction MD01 that is used for foreground (on-line) processing. Alternatively to RMMRP000 you can schedule variants through transaction MDBT. I usually plan two MRP jobs for my customers: 1. Weekly MRP: MRP NEUPL on Monday morning: we start with a new week and all materials are processed. All processing indicators are reset.

2. Daily MRP: MRP NETCH runs from Tuesday to Friday, early in the morning, only materials that have undergone some type of planning relevant change are picked up for MRP, safely assuming that all other materials are still OK. The processing indicator of the materials in these runs are reset, the ones not included in MRP are untouched. Note that in this MRP run setup there are two jobs: daily and weekly. This results in an MRP run on every day except Saturday and Sunday. Obviously if weekends are working days for your companys planning department weekends needs to be included as well. Also MRP runs in the morning and not before midnight. You want the stock date to be todays date. Even though there is only five minutes difference between before and after midnight: yesterdays stock date just looks as if you are using data that is not current. I recommend staying away from NETPL. There is really no advantage using this procedure; only risk. Different Planning Views End-users can get confused about the difference between; MD04 Stock/requirement List and MD05 MRP List. MD05 will show only the situation as it was since the last MRP run. This transaction is suitable for reviewing the MRP run. Without taking into account new stock issues or receipts MD05 is ideal for evaluating your MRP parameters. Look at the stock date, this is the date of the last MRP run. MD04 will show you the current stock situation taking into account all requirements and planned receipts. The stock date is always current (=today). This view is appropriate if you make procurement decisions in dynamic environments, i.e. requirement situation changed a lot since the last MRP run. Example: MRP has run for a material on Monday early morning. The planner will not evaluate the procurement proposals until Monday afternoon. Customer service entered a large number of sales orders in the system, and the warehouse already shipped quantities. In this case I suggest the planner uses MD04 to get the most up-to-date planning situation. On top of that I would actually recommend the planner gets out of bed early and does the planning evaluation first thing in the morning. If a planner allows a lot of changes to happen, the procurement proposal out of MRP may not make sense anymore. Stock Types in SAP Used in the determination of available stock of a material, the Stock Type is the sub-division of inventory at a storage location based on the use of that inventory. In SAP, there are many kinds of stock types: Valuated Stocks are the stocks which belongs to your company. There are three types of valuated stocks Unrestricted Stock is the physical stock that is always available at a plant/storage location

Quality Inspection Stock is not counted for unrestricted use and may be made available for MRP. To give an example, you want to do inspection on arrival, you shift your stock to Quality inspection stock then you do the quality inspection Blocked stock is not counted as unrestricted stock and is not available for MRP.

Non Valuated stock is the stock which you will keep in your premised and this is not valuated in your company The GR-blocked stock denotes all the stock accepted conditionally from the vendors. This stock is not considered available for unrestricted use. You will use the Movement Type 103 for the GR-blocked stock and Movement Type 101 is used for a normal GR. Special stock is the stock managed separately that does not belong to company or that are stored at particular location

SAP Report Painter: A Scenario Based Step by Step Tutorial Being mainly used for creating Controlling Module (cost center accounting, internal orders, profit center accounting), Report Painter is a tool for quickly defining reports across rows and columns in the information system. In this document, based on a scenario you will learn how to develop a custom report using Report Painter. 1. 2. 3. 4. 5. 6. Display Library GR23 Characteristics, Key Figures, Create Variables GS11 Create Report GRR1 Report Group GR52 Transporting Reports GCTR

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