MATERIAL MANAGEMENT

Organizational levels involved in MM:

1) Client
2) Company Code
3) Plant
4) Purchasing Organization
5) Purchasing Group
Client:
A grouping or combination o legal! organizational! business and"or
administrati#e units $ith a common purpose%
Company Code:
&his le#el represents an independent accounting unit $ithin a client% 'ach
company code has its o$n balance sheet and its o$n proit and loss statement%
Pur!asing Organization:
Purchasing organization is responsible or procurements or one or more plants
and it negotiates the pricing and deli#ery terms $ith #endors% Purchasing organization is
a legal entity or all purchasing acti#ities%
Plant:
Plant is a place $here materials are produced or goods and ser#ices are
pro#ided
"torage Loation:
(t is a physical location $ithin a plant $here in#entory is stored%
Proess #lo$ in MM:
1) )etermination o re*uirements
2) +ource )etermination ,or pricing)
3) -endor selection and Comparison
4) Purchase Order processing
5) Purchase order ollo$ up ,monitoring)
.) Goods recei#ing and in#entory management
/) (n#oice #eriication
0) Payment processing
E%ternal Prourement in MM:
&here are t$o types o e1ternal procurement in 223
1) Procurement or +toc4 ,material master record is a must)
2) Procurement or direct consumption ,material master record may or may not be
present%5( is also in#ol#ed as accounting is done)
Organization o& Pur!asing Organization $it!in an organization an 'e done in t$o $ays:
1) Centralized ,i%e% only one or $hole organization)
2) )istributed ,many or one organization)
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(o$ pur!asing douments are di&&erentiated in "AP:
6 7sing document types%
Pur!ase doument num'ering:
8umbering a purchasing document is done in t$o $ays3
1) (nternally by the system
2) '1ternally based on user re*uirement
Master )ata in MM:
2aster )ata in 22 in#ol#es3
1) 2aterial 2aster
2) -endor 2aster
3) Purchasing 2aster )ata
a% Purchasing (no 9ecords
b% +ource :ist
c% ;uota Arrangement
*!at is Material Master )ata+
(t is a central master record or logistics% (t is a central repository or all the material o
the organization% One master record is li4ed to #arious modules li4e +)! ;2! PP! 5(CO!
and '<+%
*!at does Material Master )ata ontain+
1) General )ata
2) Plant )ata
3) 2aterial Planning and Control , i%e% 29P)
4) Purchasing )ata
5) +ales and )istribution )ata
.) Accounting and Costing )ata
/) =arehouse )ata ,+torage)
0) 5orecasting
>) ;uality 2anagement )ata
*!at are t!e organizational levels possi'le &or a material master reord &rom
pur!asing vie$+
1) Client le#el ,2A9A)6 General 2aterial )ata is in#ol#ed
2) Plant le#el ,2A9C)
3) +torage :ocation le#el ,2A9))
Material Num'ering:
1) (nternally ,by the system)
2) '1ternally ,based on user re*uirement)
*!at are t!e TCO)E" &or Material Master )ata+
22?1 @ Create 2aterial 2aster
22?2 @ Change 2aterial 2aster
22?3 @ )isplay 2aterial 2aster
*!at is ,endor Master )ata+
2
-endor 2aster contains the list o all the #endors that supply an enterprise% (t is
maintained or t$o reasons3
1) 2aintenance o Accounting )ata
2) 2aintenance o Purchasing )ata
*!at does ,endor Master )ata ontain+
(t contains inormation about
1) General )ata
2) Company Code )ata
3) Purchasing )ata
5or each #endor%
*!at is t!e prominene o& an aount group+
'ach #endor is assigned to an account group% An account group determines
1) number assignment
2) partner determination schemas
3) to chec4 $hether a one time #endor is in#ol#ed
*!at are t!e partner roles in MM+
1) -endor
2) Ordering address
3) Goods +upplier
4) (n#oicing party
*!at are material types+
&he material type identiies the characteristics o a material that are important $ith
regard to Accounting and (n#entory 2anagement% A material is assigned a type $hen
you create the material master record%
*!at are general standard material types+
1) 9a$ 2aterial
2) +emi 5inished
3) 5inished
4) &rading Goods
5) +pare Parts
*!at are t!e TCO)E" &or ,endor Master Reords+
AB?1 @ Create -endor 2aster
AB?2 @ Change -endor 2aster
AB?3 @ )isplay -endor 2aster
*!at does Pur!asing in&o reords ontain+
&hese records basically contain material #endor relationships% (t contains inormation
about -endor Price! 2aterial 8o! )eli#ery terms! and payment terms% &he records get
updated automatically $hen a purchasing transaction ta4es place%
*!at are t!e TCO)E" used to $or- $it! pur!asing in&o+
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2'11 @ Create Purchasing (no 9ecord
2'12 @ Change Purchasing (no 9ecord
2'13 @ )isplay Purchasing (no 9ecord
*!at is t!e data t!at is maintained under pur!asing in&o reords+
1) General )ata
2) Control )ata
3) &e1ts
4) Prices and Conditions
5) Price <istory
*!at are t!e di&&erent units t!at an 'e applied &or a material+
1) Case unit o measure
2) +ales unit
3) Order unit
4) 7nit in $hich material is transerred to production plant etc%%!
*!at are priing ondition master reords+
As name indicates it is used to calculate price or a material% (t in#ol#es pricing
procedures! condition records! condition tables and access se*uences%
*!at is soure list+
&he source list is a master record $hich speciies the possible sources o supply or a
gi#en material%
*!at are t!e TCO)E" used &or soure list+
2'?1 @ &o create and change the source list
2'?3 @ )isplay the source list
MM )OC.MENT #LO*:
1% Purchase 9e*uisition
2% 9e*uest or ;uotation
3% Price Comparison
4% PO Generation
5% Order 2onitoring
.% Order Ac4no$ledgement
/% Goods 9eceipt
0% (n#oice -eriication
>% Payment Processing
Pur!ase Re/uisition:
&Code 2'518
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Purchase re*uisition is an internal document $hich is generated $hile raising an
indent to procure a *uantity o material so that it is a#ailable at a certain point o time%
Re/uest &or 0uotation:
&Code 2'41 ,Create 95;)
2'4/ ,2aintain ;uotation)
2'4> ,Compare 95;)
&ransers the re*uest deined in the re*uisition or materials to the #endors to
submit their *uotation or the supply o materials or the perormance o ser#ices%
Prie Comparison:
&Code 2'4>
All the *uotations that are sent by dierent #endors $ill be e#aluated here and
the #endor selection process $ill be done%
Pur!ase Order :
&Code 2'218
(tDs a re*uest rom the organization to a #endor to deli#er the *uantity o materials
or to perorm ser#ices at a certain point o time%
Order Monitoring:
Material $ise 2'22
,endor $ise 2'2:
Contrat:
Contract is a type o outline agreement or long term buying arrangement% (tDs a
commitment to procure the materials rom #endor as and $hen re*uired during a certain
o#erall time rame%
"!eduling Agreement:
(tDs an outline agreement against $hich materials are procured at a series o
predeined points in time o#er a certain period%
Generally this component is used i the company $ants a longer term purchasing
arrangements $ith #endor regarding the supply o materials%
Consists o lines indicating the indi#idual *uantities $ith their corresponding
planned deli#ery dates%
Goods Reeipt:
&Code 2(GO
A goods receipt ,G9) is a goods mo#ement $ith $hich the receipt o goods rom
a #endor or rom production is posted% A goods receipt leads to an increase in
$arehouse stoc4%
Goods issue
A goods issue ,G() is a goods mo#ement $ith $hich a material $ithdra$al or
material issue! a material consumption! or a shipment o goods to a customer is posted%
A goods issue leads to a reduction in $arehouse stoc4%
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"to- trans&er
A stoc4 transer is the remo#al o material rom one storage location and its
transer to another storage location% +toc4 transers can occur either $ithin the same
plant or bet$een t$o plants%
Trans&er posting
A transer posting is a general term or stoc4 transers and changes in stoc4 type
or stoc4 category o a material% (t is irrele#ant $hether the posting occurs in conEunction
$ith a physical mo#ement or not% '1amples o transer postings are3
&ranser postings rom material to material
9elease rom *uality inspection stoc4
&ranser o consignment material into companyFs o$n stoc4
Invoie ,eri&iation:
&Code 2(9O
Ta'les t!at are ommonly used in MM:
2AB& 2aterial )escriptions
2A9A General 2aterial )ata
2A9C Plant )ata or 2aterial
2A9) +torage :ocation )ata or 2aterial
2A+& 2aterial to CO2 :in4
2C'= 2aterial -aluation
2BP5 <eader6 2aterial )ocument
2+'G )ocument +egment6 2aterial
'CA8 Purchase 9e*uisition
'BBO Purchasing )ocument <eader
'BPO Purchasing )ocument (tem
:5A1 -endor 2aster ,General section)
:5C1 -endor 2aster ,Company Code)
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