Unit 11
Materials Management (MM)
- Rules -
Business Process Integration
MM
January 2008
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Rules
2
Rules
Defines the parameters for Master Data and Transactions Determines functionality for Master Data and Transactions Relatively fixed Changes as policy changes
January 2008
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Materials Management (MM)
SD MM
Materials PP Mgmt. Production Planning Sales and Distribution
FI
Financial Accounting
CO
Controlling
SM
R/3
Client / Server Integrated Business Solution
HR
Human Resources
AM
Fixed Assets Mgmt. EC Enterprise Controlling
Service Mgmt.
QM
Quality Mgmt.
PS WF
Workflow
PM
Project System
Plant Maintenance
IS
Industry Solutions
January 2008
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Procurement Process
(Procure-to-Pay)
Purchase Requisition
Purchase Order
3Way Match Payment to Vendor Invoice Receipt
Notify Vendor
Vendor Shipment Goods Receipt
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Unit 11 Overview
Reservations Tolerances
Purchasing Goods Receipt Invoice Receipt
Automatic Account Assignment Invoice Verification
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January 2008
Reservations
A request to have a material ready for issue at a future date for a production order, sales order, etc. The purpose of a reservation is to ensure that a material is available when required and not assigned to another use
January 2008
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Purchasing Tolerances
A tolerance limit is set for allowed variance before a warning/error message is displayed
Price variance
Compares the price in the purchase order with the valuation price stored in the material master
Maximum cash discount
This tolerance limit is set to assure that cash discounts do not exceed allowable discounts
January 2008
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Goods Receipts Tolerances
Purchase order price quantity there are two tolerance levels maintained per item
The maximum percentage variance before a goods receipt postings is not allowed A percent variance that generates a warning message but allows posting
Moving average price variance the maximum allowable moving average price change allowed
January 2008
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Invoice Receipts Tolerances
Many tolerance limits that can be configured for invoice receipts: price, quantity, and blanket purchase orders These tolerances include:
Amount for item with or without order reference Form small differences automatically Percentage Over/Under Quantity Variance Exceed amount: quantity variance Blanket purchase order value and time limit Price variance
January 2008
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10
Automatic Account Assignment
Automatic account assignment is created to avoid manual postings of financial transactions which follow goods movements to reflect the values of transferred materials Automatic account assignment is used across all modules to keep track of the values of materials that are being consumed (e.g., production), or transferred into other valuation areas of the company
January 2008
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Automatic Account Assignment (continued)
Automatic account assignment is a set of rules and master data which enable the financial tracking of logistics movement
January 2008
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Automatic Account Assignment Components
Components of Automatic Account Assignment
Chart of Accounts Valuation Grouping Code Transaction Key Modifier for Transaction Key Valuation Class
January 2008
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Automatic Account Assignment Valuation Grouping Code
Valuation grouping code - groups valuation areas together
Example: valuation area is plant, five plants exist in the company, all five plants use the same accounts. Multiple valuation groups are possible
January 2008
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Automatic Account Assignment Valuation Grouping Code
Grouping Code G001 Plant P001 Grouping Code G002 Plant P004
Plant P002
Plant P005
Plant P003
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January 2008
15
Automatic Account Assignment Transaction Keys
Transaction Keys
The transaction keys are used to determine accounts or posting keys for line items which are created automatically by the system. The transaction keys are defined in the system.
January 2008
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Automatic Account Assignment Transaction Keys
Transaction Keys
Inventory Postings
BSX
Offsetting Entry for Inventory Postings
GBB
Materials Management Small Differences
DIF
Cost (price) differences (PPV)
PRD
Goods receipt / inv. receipt clearing acct
WRX
January 2008
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Automatic Account Assignment Modifier
Modifier modifies the transaction key for various movement types
Blank Goods receipt from purchase order with account assignment VBR Goods issue to consumption VAX Goods issue to sales post to cost of goods sold AUF Goods receipt from a production order post to production settlement Etc. Many others
January 2008
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Material Types & Valuation Classes
Account category reference:
Builds the link between material types and the valuation class(es)
Material Type Account Category Reference Valuation Class
ROH
HIBE HAWA FERT
0001 Reference for Raw Materials
0002 Reference for Operating Supplies 0005 Reference for Trading Goods 0009 Reference for Finished Products
3000/3001/3002/3003
3030/3031 3100 7920
January 2008
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Material Types & Valuation Classes
Valuation Class 3000 (Steel)
Material Type ROH (Raw Material)
Acct Cat. Ref 0001 Raw Materials
Valuation Class 3001 (Paper)
Valuation Class 3003 (Plastics)
January 2008
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Automatic Account Assignment
Plant P001 Plant P002 Plant P003
Valuation Class 3100 (Trading Good) Valuation Class 3100 (Trading Good) Valuation Class 3100 (Trading Good)
Grouping Code G000
Grouping Code G000
Grouping Code G001
Goods Movement GBB (Goods Issue)
Goods Movement GBB (Goods Issue)
Goods Movement GBB (Goods Issue)
Account Modifier VBR (Iss. To Cons.)
Account Modifier VBR (Iss. To Cons.)
Account Modifier VBR (Iss. To Cons.)
Account 790000
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Account 790001
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Automatic Account Assignment
What: Where Valued: Why 1: Goods Movement Transaction Event Key Why 2: Additional Information Account Modifier Where Value is recorded: Chart of Accounts
Material
Valuation Area Valuation Grouping Code
Represented By:
Valuation Class
G/L Account
Points To:
Material Type
Plant Where Value is recorded:
Chart of Accounts -C000 790000
What:
Where Valued:
Why 1:
Why 2: Issued to Consumption VBR
BPEN000 Represented By: Points To:
January 2008
Plant P001 G000 Plant P001
Good Issue GBB
3100 HAWA
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Goods Receipt
Materials can be received as stock items or non-stock items Receipt is possible from external or internal sources Individually / collectively Tolerance limits can be set for goods receipt Special movement type for initial inventory load
January 2008
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Goods Receipt (continued)
Stock items can be received into restricted or unrestricted stock Non-stock items are received into orders, projects, cost centers Materials that are usually received into inventory can also be received into orders, projects, cost centers
January 2008
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Invoice Verification
Set parameters for invoice verification
Quantity, price, receiving date, P/O quantity Updates material master if moving average price Automatic account assignment for price differences - if allowed
Verify actual versus target
January 2008
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3-Way Match
Purchase order - Target quantity - Target price -
Invoice receipt - Actual price -
Goods receipt - Actual quantity -
January 2008
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Accounts Payable Settlement
Purchase Order Payment Program Invoice Receipt Verification
Debit Credit
Goods Receipt
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January 2008
27
Unit 11, Group 1 Exercises
89. Set Default Values for Inventory Management Reservations 90. Maintain Purchasing Tolerance Limits 91. Maintain Goods Receipt Tolerances 92. Maintain Invoice Receipt Tolerances 93. Set (Review) Valuation Control 94. Assign Valuation Area Grouping 95. Define (Review) Valuation Classes
January 2008
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Unit 11, Group 2 Exercises
96. 97. 98. 99. Configure Automatic Postings for Goods Movement Configure Automatic Postings for Taxes Set Parameters for Invoice Verification Create Default Values for Invoice Verification
January 2008
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