Introduction SAP R/3 MM
Dr. Djamal Ziani King Saud University
ERP-Software: SAP R/3
Sales and Distribution Material Management
S D M M P P F I C O
Financial Accounting
A M
R / 3
CS l te i /r e v n e r A B A P / 4
I S
Controlling
Q A P M
P S O C
H R
Components of Materials Management
Foreign Trade/ Customs Service Master MRP Material Master Inventory Mgmt. Physical Inventory Product Catalog
Valuation Logistics Invoice Verification Purchasing
Materials Management (MM)
Service Entry Sheet
Organizational Data
A hierarchy in which the organizational units in an enterprise are arranged according to tasks and functions Are static data and are rarely changed The definition of organization units is a fundamental step, it is a critical factor in how the company will be structured
Organizational Structures
Organizational Structures
Client Company Plant Valuation Area Storage Locations Purchasing Organizations Purchasing Groups
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Organizational Structures: Client
The client is a unit within an SAP R/3 system that is self-contained both in legal and organizational terms and in terms of data, with separate master records and an independent set of tables. From a business viewpoint, the client represents a corporate group, for example. Client: 3 numerical digits
Organizational Structures: Company
The company is the smallest organizational unit of external accounting for which a complete, self-contained bookkeeping system can be replicated. A company code represents an independent unit producing its own balance sheet, for example, a company within a corporate group (client). Company code = 4 characters
Organizational Structures: Plant
Lowest valuation area Organizational level where Material Requirements (MRP) runs Generally used to describe a production site, a distribution center or centralized warehouse May be a physical or logical unit
Organizational Structures: Valuation Area
The valuation area determines at which level a material is valuated (inventory value is established) SAP R/3 allows valuation at the company code or plant level, but recommends valuation area be set at the plant level. Means each plant can have its own material prices and account determination
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Organizational Structures: Storage Location
Subdivision of a plant Where materials are managed (inventory management)
Raw Materials Maintenance, Repair, and Other (MRO) Finished Product
May be a physical or logical unit
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Organizational Structures: Purchasing Organizations
An organizational unit responsible for procuring materials or services for one or more plants and for negotiating general conditions of purchase with vendors. The purchasing organization assumes legal responsibility for all external purchase transactions.
Purchasing organization
material group
purchasing organization
purchasing group MG 0, 3
purchasing group MG 1, 4
purchasing group MG 2, 5 purchasing group MG 6 plant purchasing group MG 7, 8, 9
Organizational Structures: Purchasing Organization Groups
The purchasing organization is further subdivided into purchasing groups (buyer groups), which are responsible for day-to-day buying activities.
A purchasing group can also act for several purchasing organizations. A purchasing group can be defined by line products (Frame, Engine, Tires)
Inventory Management with a Warehouse Management System
client
company code 0001 ABC inc. 0001 Jones inc. 0001 0002 0003 0002 0004 0002 Model Ltd. 0003 0001
purchasing organization plant [Link] 0001 0001
MM
factory
storage location
0002
0003
0004
warehouse number
001
storage type storage bin (physical stock)
001 05-04-03
002 05-04-04
WM
The Module MM Main Functions
MM interdependencies to other modules
Logistik
PP production planning MM material master purchasing requirements plan. SD sales and distrib.
QM quality management
inventory mgmt. invoice verification
PM plant maintenance
FI financial acc.
CO controlling
AM fixed assets mgmt.
Basic Data
Master records - include information about
1. vendors 2. material and services to be procured 3. the relation between 1. and 2. (purchasing info record) e.g. prices / terms and conditions
bills of material for
production planning purchasing sales and distribution withdrawal of Material
Structure of the Vendor Master Record
sections
utilization
area of validity
General data name address control data
purchasing terms and cond. partner functions currency
client wide
request for quotation quotation processing purch. order handling
for each purchasing organization
accounting data bank account acc. maintenance payment
invoice entry invoice verification payment handling
client wide or for each company code
Create a Vendor
Creating Your Own Vendor Master Record
Usage
We recommend that you create your own vendor master record for this scenario. If, however, you prefer to use the reference vendor instead, it could be that the order currency has already been changed and this IDES scenario may no longer work. You create a German vendor in company code 1000, IDES AG Germany, to create purchase orders and invoices denominated in euros.
Create a Vendor
Procedure
[Link] up the transaction as follows:
Menu Path
Logistics Materials Management Purchasing Master Data Vendor Central Create
Transaction Code
XK01
Create a vendor
On the Create Vendor: Initial Screen, enter the following data:
Field Vendor Data Your own vendor (choose a number between 1000 and 1999) 1000 1000 LIEF
Company code Purch. organization Account group
Reference vendor
Reference company code Reference purchasing organization
1080
1000 1000
Create a Vendor
On the Create Vendor: Address screen, enter the following data: Field Description Search term Street/House number Postal code/City Data Any Any, for example "euro" Any 5-figure, numerical (any)
Country
Language
DE
DE
Create a Vendor
1. Choose until you reach the Create Vendor: Accounting and make sure that 160000 appears in the Reconciliation Account 160000 field. 2. Choose appears. until the Create Vendor: Purchasing Data screen
3. On the Create Vendor: Purchasing Data screen, check that the order currency is EUR.
4. Choose appears. 5. Choose appears. 6. Choose appears. until the Create Vendor: Partner Functions screen until the Create Vendor: Partner Functions screen until the Create Vendor: Partner Functions screen
Create a Vendor
Create a Vendor
Create a Vendor
Views on the Material Master Record
each view is maintained by a certain user department of the firm
accounting: valuation- und calculation-specific information requirements planning: information about material requirements
planning (e. g. reorder point) purchasing: e. g. responsible purchasing group, order unit engineering: technical information storage: information about warehousing, material movements, ... forecast: information about the forecasting of the material requirements S & D: informationen about sales orders and price determination
Demo: Create Material Master
Demo: Create Material Master
Select the views: Basic data 1, Purchasing, Purchase Order text, Gl. Plant Data/Storage 1, Accounting 1
Demo: Create Material Master
Demo: Create Material Master
Demo: Create Material Master
Demo: Create Material Master
Demo: Create Material Master
Demo: Create Material Master
SAVE
purchasing info record
info record prices terms & cond. PO statistics
tolerance levels
date quotation order outline agreement
Purchasing Process
PO
? =
invoice
X X X X X
invoice verification
determination: requirements vendor
X X X X X
outline agreem.
determination: source of supply
MM
goods received & inventory mgmt.
vendor 2 vendor 1
PO PO
vendor selection
PO
PO monitoring purchase order processing
Create Purchase Order (PO)
vendor 2
1 vendor known
purch. order
terms & cond.
2 vendor not known
outline agrement info record
source list
purch. order
vendor
vendor 2
purch. req.
purch. order
assigned purchase requisition exists (from user department)
Purchasing Process
Create a requisition First release of requisition Create RFQ (Request for Quotation) with reference to requisition Create PO (Purchase Order) with reference to RFQ Department receives material ordered (GR) Department pays invoice (MIRO).
Purchase Requisition
Document generated by a user department or storeroom-personnel to notify the purchasing department of items it needs to order, their quantity, and the timeframe. It may also contain the authorization to proceed with the purchase. Also called purchase request or requisition.
Request for Quotation
Is a standard business process whose purpose is to invite suppliers into a bidding process to bid on specific products or services. RFQ generally means the same thing as IFB (Invitation For Bid)
Purchase Order
Buyer-generated document that authorizes a purchase transaction. It sets forth the descriptions, quantities, prices, discounts, payment terms, date of performance or shipment, other associated terms and conditions, and identifies a specific seller.
Create Purchase Requisition
Create Purchase Requisition
Create Purchase Requisition
In the item, enter your material, Plant= 1000, QT = 100
Create Purchase Requisition
Save your Purchase requisition Take note of Purchase requisition number
Demo: Create Purchase Order
Demo: Create Purchase Order
Open document overview: Click on document overview button Choose Selection variant list icon Then select My purchase requisition, you will get your purchase requisition listed Click on adopt icon, your purchase requisition will be copied to the purchase order (or you can drag and drop it into the shopping cart)
Demo: Create Purchase Order
Demo: Create Purchase Order
Enter your vendor, and price 30 euro and save
Posting an Order Entry (Goods Receipt)
Logistics
PP production planning MM purchasing req. planning goods receipt inventory mgmt.
goods issue.
transfer posting
SD sales and distrib.
QM quality management
inventory controlling
invoice verification
PM plant maintenance
FI financial acc.
CO controlling
AM fixed assets mgmt.
Goods Receipt: Transfer posting
Unrestricted stock: You can consume the material stock in unrestricted use. Quality inspection: Area controlled by QM to inspect the quality of material. Blocked stock: is a holding area for materials that have not been posted to a companys warehouse stock.
Demo: Posting Order Entry (Goods Received)
1. Use T_code : MIGO 2. Select Goods Receipt 3. Select Purchase Order 4. Enter PO number for goods to be received. 5. Hit "Enter"
Demo: Posting Order Entry (Goods Received)
6. Enter Document date & posting date 7. Enter Header text (comment) if necessary. 8. Close detail data.
Demo: Posting Order Entry (Goods Received)
9. Notice that movement data is "101" 10. If you only received first item, then Check the "OK" box for first line [Link], the second item need not be processed
Demo: Posting Order Entry (Goods Received)
11. If you only received 3 pcs out of 10 pcs of item one & 2 pcs out of 10 pcs of item two, then Check the "OK" box for both line item 12. Input actual quantity (3 & 2 pcs ). 13. Hit "Enter"
Demo: Posting Order Entry (Goods Received)
14. Click "Check" button to find out if there is any error. 15. Check the "status" column . . Green means OK . Yellow means Warning . Red means error
Invoice Verification
input information invoice verification actions: enter invoice verify invoice post invoice update relevant data (re-edit invoice) output information orders goods receipt
master data: material vendors accounts
terms & cond.
financial accounting asset management cost accounting
Invoice Verification
When you post an invoice, an accounting document is created:
Update Vendor account
Update the account GR/IR (Goods Receipt/Invoice Receive) Update master data: moving average price, value Update purchase order history
Create Invoice
Create Invoice using Tcode MIRO
Enter the Required details in all Tabs
Enter the Purchase order no. and click on Enter, to display the material details.
Create Invoice (contd..)
Click the check box, to calculate the Tax
Create Invoice (contd..)
Enter the Amount and click on save
Create Invoice (contd..)
Invoice is created
Demo: Invoice Verification
Using the tcode: MIRO"
Demo: Invoice Verification
Demo: Invoice Verification
net amount for positions
