SAP
an over view of material
management module
INTRODUCTION
SAP is the abbreviated form of Systems
applications and products in data processing.
It was founded by five former employees of IBM
in the year 1972. Headquartered in Germany, it
is the leading global provider of client server
based business software solutions. With a
market share of 31 % ,the company has become
the leading provider of standard business
application software .
It has become the fourth largest independent
software supplier in the world . Its popularity
can be estimated from the fact that more then
8000 companies in 50 countries are running on
this software , popular examples being INTEL.
Result of the above fact is that the turnover of
the company has reached more then six billion.
Material Management
Material Management is one of the SAP R/3
System application modules that integrate data
in supporting all of a company’s business
transactions.
The Material Management module is used to
examine the typical operations of the R/3
System in processing transactions.
CONTINUED……
Contains components for purchasing,
receiving, warehouse management, and
inventory.
MM reduces the time, cost of purchasing, and
uses precise inventory management resulting
in less stock-outs. Requisitions, purchase
orders, and receiving are fully integrated with
budgeting and financial accounting.
Continued…
Comprehensive reports allow you to answer
questions like the following: How many
pencils did we buy last year, quarter, or
month? Who did we buy pencils from and how
did the cost compare? What has been the trend
in fuel prices during the past nine months?
You can also forecast future needs using
different forecasting models.
Masters in Materials Management:
Material Master
Vendor Master
Service Master
Material Master Purpose
The material master contains information on
all the materials that a company procures,
produces, stores, and sells. It is the company's
central source for retrieving material-specific
data.
All the information your company needs to
manage a material is stored in a data record in
the material master, sorted by various different
criteria.
INITIAL SCREEN OF MATERIAL
MASTER RECORD
Vendor master
Information about external suppliers
(creditors). The vendor’s name and address,
the currency the vendor uses, and the vendor
number (stored in the SAP system as an
account number) is typical vendor data.
INITIAL SCREEN OF VENDOR
MASTER RECORD
Service master
A repository for the descriptions of all services
that a firm frequently procures. There is a
service master record for each service
description.
SOME DEFINATIONS
Client:-
In commercial, organizational, and technical
terms, a self contained unit with separate
master records and its own set of tables. A
client can, for example, be a corporate group.
Purchasing Organization:-
An organizational unit subdividing an
CONTINUED….
enterprise according to the requirements of
Purchasing. It procures materials and services,
negotiates conditions of purchase with
vendors.
Sales Organization:-
An organizational unit subdividing an
enterprise according to the requirements
of sales.
CONTINUED….
MATERIAL NUMBER…..
Number uniquely identifying a material master
record, and thus a material. It could be
generated internally (by the system itself )or
could be given by the user (externally). You
can assign mnemonic keys or nemonic keys as
material numbers, depending on the method
your company prefers.
MATERIALS TYPES
Materials with the same basic attributes are
grouped together and assigned to a material
type. This allows us to manage different
materials in a uniform manner in
accordance with our company's
requirements .
MATERIAL TYPE CODES
ERSA:-spare parts
HIBE:- operating supply
FHMI:- production resources or tools
ROH:-raw materials
FERI:-finished goods
HALB:-semi finished goods
PURCHASE CYCLE…..
Purchase Requisition
Invoice receipt
Request for Quotation
Goods receipt
Purchase Order
PURCHASE REQUISITION
A purchase requisition is a request or
instruction to Purchasing to procure a certain
quantity of a material or a service so that it is
available at a certain point in time.
Request for Quotation
A request for quotation (RFQ) is an invitation
extended to a vendor by a purchasing
organization to submit a quotation (bid) for the
supply of materials or performance of services
Goods receipt
In goods-receipt-based (GR-based) invoice
verification, the invoice relates not to the
purchase order, but to individual deliveries.
That is to say, the reference document for the
invoice is not the PO but the delivery note or
the goods receipt document.
Invoice receipt
The invoice relates to the individual deliveries
and not to the purchase orders. The reference
document for the invoice is not the purchase
order but the delivery note on the goods
receipt document. We get to know that when
the orders are going to be fulfilled by the
means of many partial deliveries.
Purchase Order
A purchase order is a formal request or
instruction from a purchasing organization to a
vendor or a plant to supply or provide a certain
quantity of goods or services at or by a certain
point in time .
TABLE OF IMPORTANT
TRANSACTION CODES
Material Master
MM01 Creation of Material Master
MM02 Change of Material Master
MM03 Display of Material Master
Purchase Requisition
ME51N Creation of Purchase Requisition
ME52N Change of Purchase Requisition
ME53N Display of Purchase Requisition
ME54N Release of Purchase Requisition
MORE TRANSACTION CODES
Request for Quotation (RFQ)
ME41 Creation of RFQ
ME42 Change of RFQ
ME43 Display of RFQ
Purchase Order (PO)
ME21N Creation of PO
ME22N Change of PO
ME23N Display of PO
SUGGESTION AND
CONCLUSIONS
As we know that the SAP R/3 is an integrated business
system designed to help organization run such business
process as managing inventory, creating requisitions,
processing sales orders, paying invoices and so on.
SAP R/3 provides a single integrated system to handle
the needs of all departments in a corporation. This
integration is the single biggest advantage to SAP R/3.
As per the discussion in the study we conclude that:
SAP R/3 is rich in functionality & highly configurable.
