MM Cookbook - Process Flow

   

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. 

Determination of Source of Supply

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. 

Vendor Selection and Comparison of Quotations

The System is capable of simulating pricing scenarios and simplifies the selection of vendors by making price comparisons between the various quotations. 

Purchase Order Processing

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. 

Purchase Order Monitoring

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. 

Goods Receipt and Inventory Management

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 

Purchasing Functionality is integrated with Inventory Management and Invoice Verification within MM. 

MM Cookbook - Enterprise Structure

Define valuation level

BACKGROUND 

This configuration setting enables to define at which level the stock are to be valuated in SAP.  

Stocks can be valuated at following two levels in SAP. 

Plant level Company code level

It is recommended to keep at plant level. This is a client level setting.

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. 

Plant is assigned to the company code. 

Storage locations are created under each plant. 

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

 

5. Enter from plant as 0001 to copy from SAP defined plant 

6. Enter To Plant – E.g. IND6

7. Click

8. Click to return to main menu.

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.

Maintain plant details and Factory calendar in Plant

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

5. Maintain the entire address, contact details of the plant.

6. Factory calendar must be attached to the plant

Below screen shows the details of plant settings.

 Define Location 

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:

Field Name Description Value Plant Name of the plant e.g. IND6 Location Location identification E.g. PROD Name Description of the location Production location

4. Click

Note: - Maintain the address of the location in the subsequent screen. 

 

5. Enter title as Company

6. Enter country

7. Click

Click .

Maintain Storage Location

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. 

Storage locations can be assigned to the warehouse through warehouse management.

INSTRUCTIONS 

Follow the Menu Path: IMG ® Enterprise structure ® Definition ® Materials Management ® Maintain storage location  

Click  

 

Enter the plant where the storage location is to be created. E.g. IND6 

Click  

Click  

Enter Storage location 

Enter description of the storage location 

Click  

 

Select the storage location 

Double Click  

Enter the sequential number 1 

Click  

Select the sequence number 

Click  

 

Maintain the address. 

Click  

Click  

Repeat the above to maintain the address for all storage locations

Maintain Purchase organization

BACKGROUND 

This configuration setting enables to define the purchase organization. 

Purchase organization is the part of the enterprise structure from MM point of view. It represents the responsibilities to  

Procure materials and services  Negotiation with vendor

Purchase organization is assigned to the company codes and plants. Following are the possibilities of assignments.

One purchase organization to many company codes  One purchase organization to one company code  One purchase organization to one plant

Note: - It must be assigned to plant.

INSTRUCTIONS 

Follow the Menu Path: IMG ® Enterprise structure ® Definition ® Materials Management ® Maintain purchase organization  

1. Click

 

2. click

3. Update the following fields

Field Name Description Purch.organization Key identifying the purchase organization.

E.g. IND6 Purch.org.descr. Description of the purchase organization.

E.g. For plant IND6

4. Click .

 Assign Plant to company 

BACKGROUND 

This configuration setting enables to assign plant to the company code.  

INSTRUCTIONS 

Follow the Menu Path: IMG ® Enterprise structure ® Assignment ® Logistics – General ® Assign plant to company code  

1. Click

2. Select the desired company code by clicking the cursor on it.

3. Click

4. Select the plant from the display

5. Click

6. Click .

 Assign purchase organization to the company code

BACKGROUND 

This configuration setting enables to assign the purchase organization to a company code.

INSTRUCTIONS 

Follow the Menu Path: IMG ® Enterprise structure ® Assignment ® Materials Management ® Assign purchase organization to company code

1. Click

2. Select the desired company code by clicking the cursor on it.

3. Click

4. Select the purchase organization

5. Click

    6.   Click

Assign purchase organization to plant

BACKGROUND 

This configuration setting enables to assign the purchase organization to a plant. 

INSTRUCTIONS 

Follow the Menu Path: IMG ® Enterprise structure ® Assignment ® Materials Management ® Assign purchase organization to plant  

1. Click

2. Select the desired plant by clicking the cursor on it.

3. Click

4. Select the purchase organization

5. Click

6. Click

All right guys, not much about MM organization structure. Now we shall look into material master related to configurations.

MM Cookbook - Vendor Creation

Definition:- 

Every vendor is identified with the code in SAP. It is called Vendor master record.

Vendor master record contains details of 

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:- 

Logistics à Materials Management à Purchasing à Master Data à Vendor à Central à XK01 Create 

Maintain Vendor code number, company code, Purchase organization and account group 

 

Click  

Maintain  

Maintain  

Note: - Click to enter more lines in the address 

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 

Note: - these entries maintained in consultation with accounts. 

Click  

 

Maintain more FI related information here. 

Click  

 

Dunning data are maintained here. 

Click  

 

Maintain order currency, terms of payment, Incoterms 

Maintain schema group vendor – to determine the right pricing procedure.  

Maintain the control data  

Click  

Click  

 

Click

MM Cookbook - Create RFQ

Definition:- 

Purchase request is the requirement document created manually or through the MRP run. Purchase request is further processed to create Purchase order document. 

It is possible to create Request for Quotation purpose. 

Let us create RFQ for a material. 

Menu Path:- 

Logistics à Materials Management à Purchasing à RFQ/Quotation à Request for Quotation à ME41 Create 

 

Double Click ME41 

Maintain the details as shown below

 

Click  

Enter collective number. Collective number is like a tracking number in PR creation used to group together and process the RFQ. 

E.g. RM10 to indicate Raw Material requirement for 10th Month 

Click  

Click F7 key to maintain Vendor address 

Maintain vendor as shown below

 

Click  

Note: - Details will be copied from info record.  

Click  

 

Click to enter material number and quantity 

 

Click  

Click  

 

Click  

Message appear at the bottom

MM Cookbook - Maintain Quotation

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:- 

Manual confirmation from vendor must be available

RFQ must be available 

Menu Path:- 

Logistics à Materials Management à Purchasing à RFQ/Quotation à Request for Quotation à ME47 Maintain 

 

Double Click ME47 

Maintain the details as shown below

 

Enter RFQ number  

Click to maintain rate at item level details 

 

Click to maintain condition record 

Maintain discount and freight as shown below. 

Click  

Click  

Enter the quotation validity period  

Enter payment terms 

Enter vendor quotation reference. 

Maintain the details as shown below.

 

Click to confirm the condition at header level 

 

Click  

Click  

 

Click  

 

Click  

Note: - To compare the price from various vendor, use transaction code ME49 – price

MM Cookbook - Create Info record

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. 

Info records are created for following types of transactions 

Standard PO Sub contracting Consignment Pipeline

When creating PO, most of the information will be copied from info record into PO. 

Info record controls  

Validity period for each vendor

Indicates vendor as preferred vendor Blocking vendor from raising PO Source relevancy to MRP Supplying plant incase of STO

Menu Path:- 

Logistics à Materials Management à Purchasing à Master Data à Info Record à ME11 Create 

 

Double Click ME11 

Maintain Vendor code number 

Maintain Material code number 

Maintain purchasing organization 

Maintain Plant 

Select the radio button Standard  

Click  

Maintain the following fields according to the business needs 

Field name Field description Number of days after which a reminder is

to be sent to the vendor for supply. Material number used by vendor.

Material group to which the vendor belongs to.

Used for volume and point based rebates.    

 Click

 

Maintain planned delivery time  

Maintain purchasing group 

Maintain standard quantity

Maintain net price 

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  

Message appear at the bottom

MM Cookbook - Maintain Source list

Definition:- 

Source list is used to find the vendor automatically during auto vendor assignment process. It is a plant specific master data. 

Through configuration, it can be made as mandatory or an optional. 

Source list controls  

Validity period for each vendor Indicates vendor as preferred vendor Blocking vendor from raising PO Source relevancy to MRP Supplying plant incase of STO

Menu Path:- 

Logistics à Materials Management à Purchasing à Master Data à Source List à ME01 Maintain 

 

Double Click ME01 

 

Maintain Material code number 

Maintain Plant 

Click  

 

Maintain valid from date 

Maintain Valid to date 

Maintain vendor code 

Maintain Purchase organization 

Note: - field is used incase of STO. Supplying plant can be mentioned here. 

Tick the check box to indicate the vendor as preferred vendor. 

Note: - Only one vendor can be indicated as preferred vendor in the same validity period. 

Check box is used to block the vendor 

If this source is to be used by MRP, fill the column.

Following are the allowed entries 

 

Click  

Click

MM Cookbook - Create Purchase Request

Definition:- 

Purchase request is the requirement document created manually or through the MRP run. Purchase request is further processed to create Purchase order document. 

It is possible to create Request for Quotation purpose. 

Let us create Purchase Request for a material. 

Menu Path:- 

Logistics à Materials Management à Purchasing à Purchase Requisition à ME51N Create

 

Double Click ME51N 

 

Click to close enjoySAP portion of the screen 

Click to open the window 

Maintain the details at item level as shown below 

 

Click  

To view more details, click the item details tab screen one by one. 

Click  

Change or maintain the details as required by the business. 

Click  

 

Click  

 

Click  

 

Click  

 

click

 

Note: - Maintain the required text here 

Click  

 

Click  

Message appear at the bottom

MM Cookbook - Create Purchase Order

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.  

Menu Path:-  

Logistics à Materials Management à Purchasing à Purchase Order à Create à ME21N – Vendor/Supplying Plant known  

   

Double Click ME21N  

Enter vendor number. E.g. IND6-1  

Click  

Enter Purchase organization, purchasing group and company code details as shown below

 

Click  

Click to view the item over view  

Enter Material, PO quantity and Plant where it is to be received as shown below.  

Click the tab screens one by one in the item detail screen. Maintain the appropriate entries.  

Click  

Note: - If material master is set with the QM inspection type 01, then stock type will be QM stock. QA control key from the material master will be copied here into the PO.

Click  

Ensure check box is ticked to have GR based Invoice.  

Enter the tax code.  

 

Click  

 

Click

Click  

 

Click to scroll down the screen  

 

Click  

Click to maintain Payment terms  

 

Note: - To send the message at the time of GR to the person who created the PO, click the

check box  

Click  

 

Click  

 

Note: - Text can be maintained here.  

Click  

 

Click  

Message will appear at the bottom

 

Click  

 

Click  

Click  

Click  

MM Cookbook - Goods Receipt against PO

By Subhajeet Behera

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.  

Goods receipt is the process of receiving materials in to the storage location.  

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:-  

Logistics à Materials Management à Inventory management à Goods Movement à MIGO – Goods Movement (MIGO)  

 

Double Click MIGO  

Maintain the entries as explained below

Ensure Goods receipt is selected in the left top box above the header details

.  

To look at the other possible entries click . Other possible entries are

 

Ensure is selected to make GR with reference to purchase order.  

Other possible entries are

 

Above two fields indicate the Process and reference document. I.e. Goods Receipt with reference to Purchase Order.  

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.  

Maintain the delivery note details

Click the tab screens one by one in the detail data area

Click  

 

Click  

 

Maintain the received quantity  

Click to maintain the storage location where it is to be received  

 

Note:- If the material is batch managed, batch number has to be entered.  

Click  

 

Click  

 

Click at the bottom  

Click at the top to verify the data correctness  

Message will appear at the bottom.  

Note: -If any warning or information message appeared, click to proceed.  

Click  

Message appear at the bottom.  

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  

 

Screen will appear as below  

 

If the item is batch managed, batch column will also appear.  

Click after completing the entry.

MM Cookbook - Create Contract

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:-

Logistics à Materials Management à Purchasing à Outline Agreement à Contract à ME31K – Create  

 

Double Click ME31K  

 

Enter vendor number. E.g. IND6-1  

Enter document type. Possible entries are

 

E.g select MK.  

Click  

Enter Purchase organization, purchasing group and storage location.  

 

Click  

Maintain the entries as shown below.  

Click  

Enter material code and target quantity. E.g. STJRM001 and 10000 respectively

Select the item  

Click to maintain the pricing conditions  

Note:- Condition which are already maintained in the info record only appear here. If required add discount condition type manually.  

Double click on item serial number to enter item detail tax  

Click  

Message will appear at the bottom

MM Cookbook - Create Scheduling Agreement

By Subhajeet Behera

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 à Materials Management à Purchasing à Outline Agreement à Scheduling Agreement à Create à ME31L – Vendor Known

 

Double Click ME31L  

Maintain the entries as shown below  

 

Click  

Maintain the entries as shown below.

Click to maintain the item details  

Maintain the entries as shown below  

Click  

Select the row by clicking the grey box in the left  

Click to check the conditions  

Note: - Scheduling agreement is used where the rate is fixed over the period of time without any changes.  

Click  

Message would appear at the bottom