Sap MM LCT Training Material Latest

SAP Materials Management Lateral Cross Training Material
26th June, 2007
Agenda Name of the section Duration (hours) Objective Pre-requisites SAP overview 6 Hrs To understand what is SAP and its various applications.
Knowledge on ERP Solution
Course Content
SAP Overview Industry Solutions from SAP Main Modules of SAP
SAP Overview
SAP stands for Systems, Applications and Products in data processing". SAP is the worlds third-largest independent software provider. SAP was founded by 5 former IBM employees in 1972 and head quartered in Walldorf,Germany. SAP is the global market leader in ERP and in collaborative and inter-enterprise business solutions
SAP overview
Various SAP Business suite : mySAP Enterprise resource planning
mySAP Supply chain management

mySAP Customer relationship management mySAP Product life cycle management mySAP Supplier relationship management
SAP overview Industry solutions from SAP
Aerospace & Defense

Banking Engineering, Construction & Operations Healthcare Industrial Machinery Consumer Products Higher Education & Research
Automotive
Defense & Security High Tech Higher Education & Research Chemicals Life Sciences Industrial Machinery & Components
Life Sciences
Media
Logistics Service Providers

Mill Products
Health Care
High Tech
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SAP overview Industry solutions from SAP (..Contd)
Mining
Postal Services Public Sector Retail Utilities
Oil & Gas

Professional Services Railways Telecommunications Wholesale Distribution
SAP-Overview
Small and medium business solutions

mySAP all-in-one SAP business one
New dimension products

Strategic enterprise management Advanced planer and optimizer Enterprise buyer profession edition Business information warehouse
mySAP technology
SAP Net weaver
SAP-Overview
SAP R/3 main modules are

Financial Accounting (FI) Controlling (CO) Materials Management (MM) Sales & distribution (SD) Production Planning and Execution - Discrete, Repetitive, Process (PP) Logistics execution (LE) Quality Management (QM) Project Systems (PS) Plant Maintenance (PM) Customer Service (CS) Human Resources (HR)
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SAP Application Modules SAP has several layers. The Basis System is the heart of the data operations and should be not evident to higher level or managerial users. Other customizing and implementation tools exist also. The heart of the system from a managers viewpoint are the application modules.
Introduction to SAP
SAP overview SAP stands for "systems, applications and products in data processing". SAP is the worlds third-largest independent software provider. Founded by 5 former IBM employees in 1972 and head quartered in Walldorf, Germany. SAP is the global market leader in collaborative and inter-enterprise business solutions SAP is the global market leader in ERP.
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Course Begins
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Curriculum
1. Introduction to Procurement 2. Organization Structure 3. Master Data

1. Material Master 2. Vendor Master 3. Customizing settings for master data 4. Purchasing 5. Inventory Management 6. Invoice Verification 7. Account Determination 8. Batch Management 9. Physical Inventory 10. Consumption Based Planning 11. Standard Reports in MM 12. Standard Tables in MM
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Agenda
Name of the section

Duration (hours) Objective Pre-requisites
Introduction to procurement
1 Hrs To understand the various organizational structures from legal and business transaction point of view.
Functional experience in Sales. Understanding of Organizational structure. Introduction to procurement Internal Procurement External procurement Methods of procurement
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Course Content
Introduction To Procurement
Definition
The process of obtaining services, supplies, and equipment from a

vendor is called Procurement.
The procurement department or the purchase department within an

organization manages all the purchases.
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Organizational levels in a procurement cycle
Client
A client can be termed as a corporate group
Company Code Plant
A company code is a company (accounting unit) within the corporate group (client)
A plant is the manufacturing facility or branch within the company

Storage location is a area in the plant where all the materials procured for the plant gets stored. Inventory management and physical inventory is carried out at the storage location level The Procurement activity is taken care by this department in the plant
Storage Location Pur Org
Note:- A plant can be one of the following # Central delivery # warehouse #Regional sales office #Manufacturing facility # Corporate headquarters
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Types of Procurement
Internal Procurement External Procurement
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Internal Procurement
In a company, goods movements do not only occur in the form of goods receipts and goods issues. Depending on the organization of the company and its sales policy, internal stock transfers may also be necessary. Stock transfer with delivery is a plant-to-plant scenario. You are posting a goods issue in plant A and a goods receipt in plant B. This type of stock transfer can only be carried out from unrestricted-use stock of the issuing plant to unrestricted-use stock of the receiving plant. In a second step, you post the placement into storage at the receiving plant. Only then is the event complete and the transferred quantity part of unrestricted-use stock. The following are a must for internal procurement between plant to plant within the same company code. Creating a stock transport order in plant B Generating a delivery in plant A Picking the material in plant A Posting the goods issue in the delivering plant i.e. Plant A Posting the goods receipt in the receiving plant i.e. Plant B The quantity posted from stock is first of all managed as stock in transit for the receiving plant. The quantity is only posted to the unrestricted-use stock of the receiving plant once the goods receipt has been posted. This enables the quantity 'on the road' to be monitored.
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Internal Procurement
You post a stock transfer from company code to company code in the same way that you post a stock transfer from plant to plant, except that both plants belong to different company codes. During the stock transfer, two accounting documents are created in addition to the material document An accounting document for the removal from storage at the issuing company code An accounting document for the placement into storage at the receiving company code The following are a must for internal procurement between plant to plant between 2 different company codes. Creating a purchase order at the receiving plant Creating delivery and billing documents at the issuing plant Posting the goods receipt at the receiving plant Posting the invoice receipt at the receiving plant The key points in this kind of procurement is The issuing plant enters a delivery for the stock transport order and a billing document. This is an inter company billing document. Pricing takes place as normal. When the goods arrive, the receiving plant posts a goods receipt for the purchase order. The unrestricted-use stock increases and an accounting document get created. The invoice is checked with reference to the purchase order. 18
External Procurement
General cycle of activities:
Payment
Determinatio n of requirement
Invoice Verification
Selection of vendors from the vendor database
Goods Receipt
Procurement
Vendor Selection and Comparison of Quotations
PO Monitoring
PO processing
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External Procurement 1. Determination of Requirements

Materials requirements are identified either in the user departments or via materials planning and control & passed on to the Purchasing department via a Purchase requisitions. You can enter purchase requisitions yourself, or they can be generated automatically by the materials planning and control system. 2. Source Determination The Purchasing component helps you identify potential sources of supply based on old orders and existing longer-term agreements with the vendor. This speeds the process of creating requests for quotation (RFQs), which can be sent to vendors. 3. Vendor Selection and Comparison of Quotations The system is capable of simulating pricing scenarios, allowing you to compare a number of different quotations. Rejection letters can be sent automatically. 4. Purchase Order Processing The Purchasing system takes up input datas from the requisition and the quotation to help you create a purchase order. As with purchase requisitions, you can generate Pos yourself or have the system generate them automatically. 20
External Procurement
5. Purchase Order Monitoring The buyer can check the status of the PO i.e. if the goods or invoices have been received for a particular PO. The system checks the reminder periods you have specified and - if necessary -automatically prints reminders or expediters at the predefined intervals. 6. Goods Receipt Goods receiving personnel can confirm the receipt of goods simply by entering the PO number. By specifying permissible tolerances, buyers can limit over- and under deliveries of ordered goods. 7. Invoice Verification Vendor invoices are checked for accuracy of prices and contents. 8. Payment Processing Based on the invoice verification, the Accounts Dept / Finance Dept normally deals with vendor payments.
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Methods of Procurement
Procurement for Stock

A stock material is a material that is kept in stock. These materials are kept in stock once received from the vendor. The stock of this materials keeps on increasing or decreasing based on amount of the quantity received or issued. To order a material for stock, the material must have a master record.
Procurement for Direct Consumption

When you procure for direct consumption, you specify the consumption purpose by entering an account assignment (for example, a cost center). To order a material for consumption, the material may have a master record.
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There are 3 basic forms of external procurement supported by MM Purchasing component.
One-time purchase orders Longer-term contracts with the subsequent issue of release orders Longer-term scheduling agreements and delivery schedules
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Forms of Procurement One-Time Purchase Order

You use one-time orders for materials or services that you order irregularly. You can reference a purchase requisition, RFQ, or another PO when creating a onetime order.
Contract and Release Orders

For materials that are being ordered regularly and in large quantities, we can negotiate a deal with the vendor for pricing or conditions & record then in a contract. In a contract you also specify the validity date.
Scheduling Agreement
If a material is ordered on a regular basis and is to be delivered according to an exact time schedule, then you set up a scheduling agreement. This method of procurement is typically used when Just-in-Time deliveries are required from the vendor (for example, in the automobile industry).
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Curriculum

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MM Enterprise Structure
Client
Plant
Purchasing Org.
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Client
Is the Highest Legal Entity An Independent Unit in R/3 System
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Company
An Independent accounting unit within the client. Each has its own P&L account and Balance Sheet
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Plant
A unit under the company All Operation of the company take place here (e.g.
Manufacturing, sales, storage Unit, Admin Building)
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Storage Location
The storage location is an organizational unit that allows the

differentiation of material stocks with in a plant. Physical Inventory is carried out at storage location level.
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Purchasing Organization
Responsible Organizational Unit for Procuring material /
Service Procure the Material / Service for one or more plants within the company
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Purchasing Groups
The groups which are responsible for day to day buying

activity in the Purchasing organization
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MM Enterprise Structure
ASPL
CLIENT COMPANY PLANT STORAGE LOCATION
PURCHASE ORGANIZATION
BDC
PURA
MDC
REF PURCHASE ORGANIZATION
BDC1
BDC2
MDC1
MDC2
Bay11
Bay12
Bay21
Bay22
Bay31
Bay32
Bay41
Bay42
PURB
PURM
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Configuration Enterprise Structure
Define here
Assign here
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Defining Organizational Elements Client : SPRO > IMG > Enterprise Structure > Definition > Financial Accounting > Define Company > New Entries
Company Code : SPRO > IMG > Enterprise Structure > Definition > Financial Accounting > Edit, Copy, Delete, Check Company Code > Copy, Delete, Check Company Code
Controlling Area : SPRO > IMG > Enterprise Structure > Definition > Controlling > Maintain Controlling Area > Maintain Controlling Area Use Currency type : 10 & Chart of Accounts as : INT
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Defining Organizational Elements

Plant : SPRO > IMG > Enterprise Structure > Definition > Logistics General > Define , copy, delete , check plant > copy, delete , check plant
Storage Location : SPRO > IMG > Enterprise Structure > Definition > Materials Management > Maintain Storage Loc ( w.r.t plant ) > New Entries
Purchase Organization : SPRO > IMG > Enterprise Structure > Definition > Materials Management > Maintain Pur. Org >New Entries.
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Assigning Enterprise Structure
SPRO > IMG > Enterprise Structure > Assignment > Financial Accounting >
Assign Company Code to Company. Company Code to Controlling area Assign Plant to Company Code Assign P.Org to Co . Code Assign P.Org to Plant
SPRO > IMG > Enterprise Structure > Assignment > Controlling> Assign SPRO > IMG > Enterprise Structure > Assignment > logistics General > SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt > SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt > SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt >
Assign Standard P.Org to Plant
SPRO > IMG > Enterprise Structure > Assignment > Materials Mgmt >
Assign P.Org to Reference P.Org
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Activate Company code for Materials Mgmt

SPRO > IMG > Logistics General > Material Master > Basic Settings >Maintain Co.Code for Materials Mgmt
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Curriculum

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Agenda
Material master
Material master contains the information on all the materials that a company procures or produces, stores or sells 1 To get familiar with Material Master
Duration (Hours) Objective Pre-requisites Course content
Material Master Introduction Material Master Demo1_ Creation of Material master Demo2_Customization settings
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Note Fields in red boxes are mandatory fields.
Introduction
What is Material Master ? How the Material master is used in all the departments ? How it is useful in creating PO ?
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Material Master
Material master contains the information on all the materials that a

company procures or produces, stores or sells. The material master record is a companies main source of material specific data. It is used by all components in the R/3 logistics system.
Material Master Data
Basic data Purchasing
Materials planning Material Master Record
S&D
Stocks in Plant/ stor Loc
Work scheduling
Accounting
Quality management
Storage
Forecasting
Warehouse Mgmt
Classification
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Material Master
Integration of all material data in a single database , prevents the

problem of data redundancy. Data contained in material master record is required for many functions with in the R/3 logistics system, for example: Purchasing data for ordering Inventory management data for posting a goods movements and managing physical inventory. Accounting data for material valuation. MRP data for material requirements planning.
Each department in company has its own view in material master Some material is valid for all organization levels, while some is valid
only for certain levels. Data at client level Data at plant level Data at storage location level
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Material Master
Maintain a material master record: screens
Material (Industry sector) (Material type)
Selective views - Basic Data - Purchasing - Accounting
Organizational levels - Plant -Storage location -..
Data screens
When creating or editing a material master data, you go through a number of
screens. From initial screen you go to two successive dialogue boxes . In the first dialogue box, you specify the view you want to process. In second you specify the relevant organizational levels. You then go to the data screens. You can change the standard screen sequence by changing the default values
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Material type
Materials with the same basic attributes are grouped together and
assigned to a material type. This allows you to manage different materials in a uniform manner in accordance with your company's requirements. Examples of material types are given in the graphic below
Material type
Number assignment
Raw materials
Control
Procurement type User departments Field selection Account determination
Semi finished
Finished products
..............
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Industry sector
Industry sector Selection Screen Control Operating suppliers Field selection
Raw materials
Like material type, the industry sector has a control function in SAP
R/3 When you create a material master record, the industry sector defines. which screens are displayed and in which order which industry specific fields are displayed in each screen Industry sector you assigned to material cannot be changed latter. In customizing , you can define new industry sectors and maintain field reference for field selection control according to your companyspecific requirements. 46
Material Type Material type controls : The type of number assignment (internal or external). The permitted number range interval. Which screens are displayed and in which order. Which user-department-specific data (view) is suggested for entry. Which procurement type is permitted for a material; that is, whether the material is produced in-house, procured externally, or whether both options are allowed. Along with the plant, the material type determines a material's inventory management requirement; that is, whether the system updates quantity changes in the material master record or updates changes in value in the stock accounts in Financial Accounting. The material type also determines which accounts are posted when a material is posted to stock or leaves the warehouse. Various material types are provided in the standard SAP R/3 System. If your company needs additional material types, you can define these in Customizing according to your requirements
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Unit of measure
In addition to the base unit of measure the system uses for stock
keeping unit and to execute all its calculations, other departments use their own unit of measure. For example Purchasing can use another unit of measure to sales and distribution or to the warehouse.
Base unit of measure: stock keeping unit. All the other unit of
measure that you use, are converted to base unit of measure. You must enter the conversion factor for the unit of measure in the material master.
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Purchasing data in material master record
In the Purchasing view of the material master Source list requirement Quota Arrangement usage Automatic PO
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Valuation class
Valuation class Material type Valuation class 1
Accounting 1
300000
Valuation class
Valuation class 2
300100
Material Master
You can use the valuation class to Combine the materials for
assigning G/L accounts so that you do not have to manage a separate stock account for each material. You maintain the valuation class in accounting view of the material master record. The valuation class allowed for a material depends on the material type and can be configured in customizing.
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Material Valuation procedures
Material valuation
Price control ( In material master )
S Standard price
V Moving average price
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Price Control
Valuation of goods receipts depends on the price control procedure

you set in the material master record. In the R/3 System, material valuation can be carried out according to the moving average price procedure (V price) or the standard price procedure (S price).
In the standard price procedure (price control S), the system

carries out all stock postings at a price defined in the material master. Variances are posted to price difference account
In the moving average price procedure (price control V), the
system valuates goods receipts with the purchase order price and goods issues with the current moving average price. The system automatically calculates the latter upon every goods movement by dividing the total value by the total stock quantity. Differences between the purchase order price and the invoice are posted directly to the relevant stock account if there is sufficient stock coverage.
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Demo1_Create Material Master

Objective To create a Material Master
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Objective Selective views for creating material master
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Demo1_Create Material Master Objective To maintain the data in Basic data1 view
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Demo1_Create Material Master Objective To maintain the data in Purchasing view
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Objective To maintain the data in Accounting1 view
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Demo2_Cutomizing settings Objective To create Purchasing group, purchasing Value keyetc
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Important T Codes in Material Master
MM 01 MM02 MM03 MM 17 MMAM MM11 MM50
Create Material Master Change Material Master Display Material Master Mass Maintenance Change Material Type Schedule creation of Material Master Extend the material view(s)
Once material masters are created from one plant same can be extended to other plants using T- Code MM 01.
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Curriculum

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Agenda
Vendor Master The vendor Master record contains all the information about the vendor that is needed to be able to conduct business with them.
Duration (hours)
Objective Pre-requisites
1
To get familiar with Vendor master N.A
Course content
Introduction Concept Important Data for Vendor Master. Demo1_Customizing Settings Demo 2_Creation,Change and display of
vendor master
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Introduction
What is meant by vendor master ?

How is it useful in purchasing?
How is your organization maintaining this master record?
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Concept
All the relevent data on vendors is managed in Vendor master

records that is specifically related to purchasing. It contains information about external suppliers like vendors name and address as well as data such as :
- General data
- Accounting data
- Purchasing data
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Account Group
When creating a vendor master record, you must specify an account group. The account group determines : The type of number assignment. Whether or not a one time vendor is involved. Which fields screens contain and whether entries in these fields are mandatory or optional.
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Partner Function
A vendor can take up different roles depending upon the requirement. these roles are called Partner roles or partner Function. some of the roles are given below: Ordering address Supplier of goods Invoicing party Payee
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Demo1_Customizing Settings
Define Define Define Define Define
Account group Number Ranges the term of payment the Partner function the Partner schemas
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Objective
To create an account group
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Objec To create an account group tive
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Objec To define Number Ranges tive
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Objecti Assign vendor Account group to number ve ranges.
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Objecti To Define Terms of payment ve
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Objec Define Partner function tive
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Objec Define partner determination procedure for tive schema.
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Objecti Define partner function in schema. ve
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Demo2_Creation of vendor master
Objecti To create a new vendor ve
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Demo2_Change of vendor master
Objecti To change a Vendor master. ve
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Demo2_Display of vendor master
Object To display a master record. ive
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Curriculum

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Customizing settings for material master
Customizing settings for material master Duration (Hours) Objective Pre-requisites Course content
Customizing the Material Master, according to our business requirement.
1
To get familiar with customizing settings with material master Material Master
Introduction Concept
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Introduction
What is customizing settings for material master ? How is it useful for end users ? How does it satisfy companys own business requirement ?
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Concept
Customizing settings for material master, we can customize fields
according to the business requirements. Most cases standard SAP providing is enough, but some case you need to customize( i.e your own industry sector, material type, no ranges.. ).
We can restrict the material number length

When ever you are creating a Material , if u select you select your
own material type and industry sector, it will display the selective views required views for our material( i.e., what we have customized )
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Demo1_Cutomizing settings for Material Master
Objecti Material number length Material (OMSL) ve
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Objecti To create Industry sector ve
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Objecti To create Material type (OMS2) ve
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Objecti To maintain a number ranges (MMNR) ve
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Objectiv To copy the standard screen sequence to e own
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Objecti To assign the screen sequences to material ve type and industry sector
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Curriculum

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Agenda
Purchase This component use to give requisition notification of requirements
of materials and/or external services and keep track of such requirements.
Duration 1 (Hours) get familiar with PR Objective Note Fields in red To boxes are mandatory fields.
Material Master, Vendor
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Introduction
Define Purchase Requisition

What are the procurement types exist?
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Concept
A purchase requisition is a request to Purchasing to procure a
certain quantity of a material or a service so that it is available at a certain point in time.
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Purchase Requisition
Requisitions can be created

Directly Indirectly
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Purchase Requisition
PR contains number of Items, for each of which a procurement type

is defined.
Following procurement type are exist.

Standard Subcontracting Consignment Stock Transfer External Service
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Concept
Changing a Purchase Requisition

If the requisition has already had a PO issued against it then it is required to inform the purchasing group If the requisition has been approved then changes are only possible to a limited extent and may themselves be subject to approval If the requisition was created by Materials Planning then you may not be able to change the requisition or it is require to notify the materials planner before making any changes.
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Define Document Types

Define Number Ranges Define Screen Layout at Document Level
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Objec To create different document types for PR tive
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Objec To assign Number ranges to a document type tive
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Objec Define Screen Layout at Document Level tive
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Demo2_ Create Purchase Requisition
Objec To create a Purchase Requisition tive
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Agenda
Request For Quotation
Duration (Hours) Objective Pre-requisites
This tool is used to manage and compare requests for quotation (RFQ) issued to vendors and the quotations submitted by the latter in response to them. 1
To get familiar with RFQ/Quotation
Purchase Requisition Course Introduction Note Fields in red boxes are mandatory fields.
Material Master, Vendor Master,

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Introduction
What is a quotation? What is RFQ ? What is the difference between the two? What is the process of vendor selection in your organization?
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Concept
Request For Quotation (RFQ) is an invite made to a vendor by
purchasing organization to submit a quotation for the supply of goods or service performance.
A quotation is a reply by a vendor to a purchasing organization related

to the supply of goods or service performance subject to specified conditions.
Price Comparison is the process of comparing the prices for all the
quotations received from vendors.
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Demo1_Creation of RFQ
Objec To create an RFQ tive
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Objec To create a RFQ tive
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107
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Demo2_Maintaining the quotation
Object To maintain a quotation ive
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Demo2_Maintaining the quotation
Object Price comparison of quotations ive
Vendor1 is ranked as 1st (green highlight) and can be selected for further processing
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Define Document Types Define Number Ranges Define Screen Layout at Document Level
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Objec To create different document types for RFQ tive
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Objec To assign Number ranges to a document type tive
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Objec Define Screen Layout at Document Level tive
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Agenda
Source list Source list specifies the possible sources of supply for a material over a given period of time Duration 1 (hours) Objective To get familiar with Source list
Prerequisites Course
Material master Vendor master Introduction

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Introduction
What is meant by source list ? How does your organization maintain this master record ? Source list specifies the possible sources of supply for a material over a
given period of time. It shows the time period in which a material may be ordered from a given vendor or under a certain long-term purchase agreement.
Source list is used in the administration of source of supply. Source list can be created manually or generated automatically. Source list you can be copied from one plant to another plant
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Demo1_Source list
Objective Maintain a source list ME01
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Demo1_Source list
Objecti Material Master settings for Source List ve
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Demo1_Source list
Objectiv Source list requirement at plant level e
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Agenda
Info record
Duration (Hours) Objective
Purchasing info record contains the concise information on a vendor and the material( i.e., the vendors current price is stored in the info record ) 1
To get familiar with info record
Prerequisites
Material master Vendor master

120
Introduction
What is meant by info record? How is your organization maintaining this master record? How is it useful in purchasing? The purchasing info record ( Info record )contains the information on a
specific material and vendor supplying the material, For example, the vendor's current pricing is stored in the info record.
Info records can be created at purchasing org / plant level or Purchasing

organization level.
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Introduction
When you create a purchase order, the system searches for info
record for purchasing organization/plant combination. If there in no record for this combination, the system searches for purchasing organization only.
You can maintain info record manually or automatically from

quotations, purchase orders or outline agreements.
Info record can be maintained for different procurement types

Standard Subcontracting Pipeline Consignment
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Demo 1_ Info record
Objec To create an Info record Purchasing org / Plant tive level
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Demo 1_ Info record
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Demo 1_ Info record
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Demo 2_ Info record
Objec To create an Info record at Purchasing tive Organization level
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Demo 2_ Info record
Objec To create an Info record at Purchasing tive Organization level
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Demo2 _ Info record
Objec To Create an Info record at Purchasing tive Organization level
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Demo3 _ Info record
Object Info Update in quotation ive
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Demo3 _ Info record
Objectiv Info Update in Purchase order e
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Demo3 _ Info record
Objec Info Update in contract ( Outline agreement ) tive
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Agenda
Purchase Order
Duration (Hours) Objective To get familiar with purchase order. PreMaterial master, Vendor master requisites
A purchase order is a formal request to a vendor to supply or provide goods or services at a certain point of time with certain quantity. 1
132
Concept
It represents the formal and final confirmation to the vendor to supply

material or service.
Its an external document created with ref to PR / RFQ/PO/Outline
agreement by the Purchasing group as per the agreed terms & conditions.
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Important Data for Purchase order

Prerequisites required for maintaining purchase order are as follows.
Header data
Vendor Order(doc.) type Purchase organization Purchase group Company code
Item data
Material no. Plant no. Quantity Delivery date Price
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Important Data for Purchase order

Item category
Item category controls the procurement process and defines whether an item requires material number, account assignment, goods receipt, and/or invoice receipt.
Standard Item categories

Standard Subcontracting Third Party Consignment Stock Transport Order
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Important Data for Purchase order Account Assignment Category

It determines the nature of account assignment and accounts to be charged when the incoming invoice or goods receipt is posted.
Standard Account assignment categories :

Asset Order Production Order Cost Center Project Unknown Sales order
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Document type
The purchasing documents are differentiated via document type, also determines which is the relevant number ranges and which field should be offered during maintenance purposes.
137
Process flow
Purchase Order
With ref.to PR
With ref. to Outline Agree.
With ref.to RFQ
138
Demo1_Creating a Purchase Order
Objectiv To create a Purchase Order e
139
Define document type Define number ranges Define screen layout Set tolerance limit for price variance
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Objectiv To Define the document type purchase order e document.
Select the document Type(NB)
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Objectiv To Define the number ranges for purchase e order document.
142
Objectiv To change the screen layout for Purchase e Order
Select the field ME21 And double click.
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Objectiv To change the screen layout for Purchase e Order
Marked the check box as Per requirement
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Objectiv To change the tolerance settings e

Click on radio button As per requirement And enter the % also
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Agenda
Outline Agreement
Duration (Hours) Objective Pre-requisite
This component can be used to enter into longer-term purchasing arrangements with vendors regarding the supply of materials or the performance of services. 3
To be familiar about Outline agreement Vendor Master Material Master

146
Outline agreement
In the R/3 System, an outline agreement is a longer-term purchase agreement concerning the supply of goods or the services performance according to predetermined conditions. These are valid up to a certain period of time and cover a predefined total purchase quantity or value. In SAP outline agreements are again subdivided into the following categories Contracts Scheduling agreements
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Definition
Structure of an Outline Agreement

Document header: It contains information relating to the entire agreement. For example, the vendor information and header conditions are in the document header. Items: It contains the information specific to the relevant material or service. Quantity or price of the item Conditions, such as quantity discounts and surcharges
148
Contracts
A contract is a type of Outline agreement between the company and the vendor for a agreed material or service which can be issued as and when required during a certain overall time frame. There are two types of Contracts Quantity contract Value contract
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Contract
You can also set up corporate buying contracts with your vendors. Plant contract/Centrally agreed contract Contract 1 Plant 1 Plant 2 Contract 2 Plant 3
Distributed contracts are centrally agreed contracts that are made

available to other R/3 Systems for the purpose of issuing release orders against them.
150
Structure of a contract
The contract consists of items defining the individual materials, material groups, or services with prices and in many cases quantities. An item is assigned to an item category, which defines the type of procurement (e.g. item category K for consignment, or L for subcontracting).
151
Contract
Contract items can relate to a single plant or to all plants belong to

a same purchasing organization (centrally agreed contract).
All the plants belong to a single purchasing organization can order

against a centrally agreed contract.
An enterprise working with a central purchasing organization hold

several plants can negotiate better conditions at a high level.
Centrally agreed contracts can be entered into with a vendors
entire corporate group. The individual contract release orders can be issued to other individual companies belonging to the vendor corporate group. This can be made possible when the partner 152
Quantity Based contract

Target Quantity as specified in the contract
Quantity contract
This type of contract is used when if the total quantity of goods to 153
Value Based contract

Target Quantity as specified in the contract
Value contract
This type of contract is used when if the total value of all release orders issued against the particular contract is not to exceed a certain predefined value.
154
Scheduling Agreements
It is a longer-term purchase arrangement with the vendor under

which materials are procured on predetermined dates within a certain time period.
Working with scheduling agreements can shorten processing times

and reduce the amount of paperwork.
You can carry out your manufacturing operations on the Just-InTime (JIT) principle.
155
Scheduling Agreements
A scheduling agreement consists of a number of items for which a
procurement type has been defined. The procurement types which are defined are as follows Standard Subcontracting Consignment Stock Transfer
Delivery of the total quantity of material specified in the agreement

is spread over a certain time period, consisting of lines indicating the individual quantities with the corresponding delivery dates.
156
S A can be created in two ways
Manually By entering all the data manually. For this the prerequisites are Account assignment-For each item to be posted to an account you need the account assignment data. Purchase organization/ Purchasing Group-You must assign the scheduling agreement to a purchasing organization & a purchasing group. Referencing Technique- By referring other documents like PR RFQs/Quotations Other Scheduling agreements
157
Demo1_Creation of Contracts
Objec To create a contract tive
158
Demo1_Creation of Contracts
159
Demo1_for Creation of Contracts
Fill in all the details related to the material
160
Demo1_for Creation of Contracts
161
Objec To assign Number ranges to the contract tive
162
Objec To assign Number ranges to the contract tive
163
Objec Define Screen Layout tive
164
Demo3_Creation of scheduling agreements
Objec To create a Scheduling Agreement tive
165
Object To create a Scheduling Agreement ive
166
Objecti To create a Scheduling Agreement ve
Fill in all the details related to the material
167
Objec To create a Scheduling Agreement tive
Agreement Number gets created
168

Objecti To create Scheduling Lines ve
Enter the scheduling agreement Number
169
Select the line items & click here to enter the schedule lines
170
Enter the scheduled Quantity Enter the date on which you need the material to be delivered
171
Demo4_Customising Settings
Objec To assign Number ranges to the Scheduling tive agreement
172
Demo4_Customising Settings
Objec To Define Document types for scheduling tive agreement
173
Agenda
Quota Arrangement
This tool forms a part of the Sourcing Administration. A quota arrangement divides the total requirement of a material over a period among certain sources of supply by assigning a quota to each source
1 To be familiar about the process of Quota Arrangement Pre-requisites Material Master Info Record Source List Course content Concept Note Fields in red boxes are mandatory fields.Arrangement 174 Important Data for Quota
Duration (hours) Objective
Concept
Quota Arrangement is a tool which is used in Sourcing

Administration
A Quota Arrangement divides the total requirement of a Material
among the certain Sources of Supply (Vendors) and then assigns the Quota to each Source.
This particular Quota specifies the portion that is to be procured

from that assigned Source.
175
Important Data for Quota Arrangement
Following are the important datas required for maintaining a Quota

Arrangement Material No/Plant No to which the Quota Arrangement applied Procurement Type of the Material Vendor Number Validity period of the Quota Arrangement Quota to be assigned to the each source of supply
176
Quota Rating Formula
Quota Rating = Quota-allocated Quantity + Quota Base Quantity

Quota Quota-allocated quantity: Total quantity from all purchase requisitions, purchase orders, release orders, and scheduling agreement schedules allocated to a given source of supply. (The quantities of quota-allocated planned orders are also taken into account)
Quota base quantity: This is the Quantity used to control the quota arrangement when new sources of supply are identified /included.
Quota: This is the number indicating the portion of total requirement of the Material that is to be given or assigned to a particular source/vendor.
177
Source Determination based on Quota Rating
The Source with the Lowest Quota Rating represents the Valid Source. If more than 1 source has the quota rating as 0, then the source with the highest quota is selected. The Concept States that higher the quota, lower the quota rating and higher the probability that the relevant source will be determined as the valid source of supply.
178
Demo 1_Quota Arrangement
PROCESS FLOW
Customization Settings for Material Master
Create Info Record
Maintain Source List
Maintain Quota Arrangement
Display Quota Arrangement
Create Purchase Order
Assign & Process Purchase Requisition
Create Purchase Requisition
Click on the text mentioned inside the Box to go to the respective slides.
179
Demo1_Quota Arrangement
Objec To make settings in material master to enable tive Quota Arrangement
180
Objec To create an Info Record tive
181
Objecti To maintain a source list ve
182
Objec To create a quota arrangement. tive
183
Objec To create a Purchase Requisition tive
184
Object To assign vendors automatically to purchase ive requisitions depending upon their Quota
185
Objec To assign and process Purchase Requisitions tive

.
Select the 1st Req & Click on Assign Automatically.
186
Depending upon the Quotas the system will assign the Vendors.
187
Select the 1st Req & Click on Assignments.
188
Vendor Information is displayed.
189
Click on the vendor & save the document then click on Process Assignment.
A Purchase Order Dialog Box will open and you will have to click on ok to draft in the Purchase Order.
190
Objec To create a Purchase Order with reference to a tive Purchase Requisition
Select the Purchase Requisition & Click adopt.
191
Objec To create a Purchase Order with reference to a tive Purchase Requisition
Click on Save
192
Objec To display a Quota arrangement tive
Note that the allocated qty has changed on the account of qty covered under the earlier 2 requisitions.
193
Agenda
Automatic creation of Purchase Order Duration (Hours) Objective
Automatic Purchase Order is a process by which the system automatically creates the purchase orders from a particular Purchase Requisition 1
To be familiar with the process of Automatic Purchase Order Pre-requisites Knowledge about Material Master, Vendor Master, Info Record, Source Note Fields in red boxes are mandatory fields. 194 List & Purchase Requisition
Concept
Automatic Purchase Order is a process by which the system

automatically creates the purchase orders from a particular Purchase Requisition
195
Demo 1_Automatic Purchase Order

PROCESS FLOW
Customization Settings for Material Master
Customization Settings for Vendor Master
Creation of Info Record
Maintaining Source List
Automatic Creation of Purchase Orders From Requisitions
Creation Purchase Requisition
196
Objecti ve
To make settings in Material master for Automatic PO to be enabled.
197
Objec To make settings in Vendor master for tive Automatic PO to be enabled.
198
Object To make settings in Info Record for Automatic ive PO to be enabled
199
Objec To maintain source list in order to enable tive Automatic Purchase Order
200
Objec To create a Purchase Requisition. tive
201
Objec To create Purchase Orders automatically from tive Purchase requisitions
Click Here
202
Objec To observe the Purchase orders created tive automatically
Note the Following
203
Agenda
Account Assigned PO Duration (Hours) Objective
It is a option in a Purchase Order by which procurement of material is possible for direct consumption 1 To be familiar with about Account Assignment PO Purchase Order Creation
Pre-requisite
Course content
Definition Concept Purpose Procurements Note Fields in red boxes are of mandatory fields.
204
Account Assigned PO
It is a option in a Purchase Order by which procurement of material is possible for direct consumption.
205
Procurement of external services
External services
Company occasionally requires small maintenance tasks( for example, changing the defective lights ) to be carried out by external contractors. This is called service PO or External services management.
To be familiar with the process of Service procurement of external services Note Fields in red boxes are mandatory fields. Pre Procurement of materials requisites Course
Introduction
206
Introduction
How does your company procure an external service?

Company occasionally requires small maintenance task ( for
example, changing the defective lights, house keeping, painting ) to be carried out by external contractors. This is called External services management or service PO
Procurement of services are of two types :

planned services un planned services
207
Concept
Master records for creating service PO: Service master record Master conditions for services Standard service catalogue Model service specifications
A service master record contains a service description and unit of

measure.
Assign a price to each service master record via conditions or can

be entered manually.
208
Concept
Stock material are subjected to inventory management, whereas
services are procured for direct consumption for eg., a cost centre, a project
The system stores services that have been performed in service
entry sheets. The relevant postings are made in financial accounting and cost accounting.
209
Concept
When entering the services , you reference the purchase order. You
can copy the planned services directly from the purchase order into the service entry sheet.
Un planned services can be entered manually. The invoice verification procedure is carried out with reference
purchase order. This means that all service entry sheets accepted for this purchase order are suggested for invoice verification.
210
MM,FI/CO,PM,PS integration
Determination of Needs PM plant maintenance PS project system
MM
External procurement Purchasing
Master data Service master record Material Creditor G/l accounts
Entry of services
Receipt of invoice Invoice verification
performed Account assgt.update
Financial accounting
211
Process Flow
Payment
Determination of Requirements
Creation of Service specifications Source determination Bid invitation
Invoice verification
Service acceptance Quotation entry Service entry sheet Award phase PO monitoring / Follow-up PO processing
212
Objecti To Create a Service PO ME21N ve
Demo1_Procurement of External services
213
Demo1_Procurement of External services
Objec Create service entry sheet ML81N tive
214
Demo1_Procurement External services
Objec Invoice verification - MIRO tive
215
Concept
Scenario handled in MM for Procurement for Consumption is

Account Assignment of PO
In Account Assignment while doing GR the relevant GL account gets

Debited
216
Options of Account Assignment
Single Account Assignment Multiple Account Assignment
217
Purpose of Procurement
Procurement for Stock Procurement for Direct Consumption
Procurement for Stock
Procurement for Consumption
218
Account Assignment Category
A key indicating whether an item is to be assigned to an auxiliary account (such as cost center) . The account assignment category determines which account assignment details are required for the item for ex : cost center or account number.
219
Account Assignment Category
Usage of Account Assignment Category in MM

Purchase Order
ASSET Cost Centre Production Order Project Sales Order Order
220
Procurement for stock v/s consumption

Procurement for Stock Procurement for Consumption
With Mat.Master Record
With Mat.Master Record
Without Mat. Master Record
Account Assignment
Enter Acc. Ass. Category Manual Acc. Assgn

Data Entry Required
Automatic Acc.Assgt
Data from Mat. Master
Stock Account
Consumption Acc. Cost Centre Asset
221
Procurement for stock v/s Procureme consumption Procureme

nt for Stock
nt for Consumpti on
Material Number is Required
Material Number is not mandato and it is possible Account Assignment Category mandatory
No Account Assignment Category
Posting to Stock Account
222 Posting to Consumption Account
Demo1_Account Assigned PO
Objec To Create Account Assignment PO by using Cost tive Centre
223
Demo2_Customising settings
Objec To Maintain Account Assignment Category tive
224
Demo2_Customising settings
Objec Defining combination of Item Category & tive Account assignment category
225
Agenda
Release Procedure
To be familiar with the process of Release Strategy Pre-requisites Different kinds of Purchasing documents present in an organization Note Fields in red boxes are mandatory fields.
Duration ( Hours) Objective
This tool forms a part of MM Purchasing. A Release Strategy is the process of approving purchasing documents electronically. 2
226
Introduction
What is a release procedure in the SAP R/3 System? How does your company currently handle this approval process? What criteria currently drive your approval process? Who currently has to approve your documents? Do certain people have to approve before others? What happens if your documents are not approved?
227
Concept
Release Procedure is the electronic approval process for releasing / approving any purchase document in SAP. It can be used to release internal documents such as Purchase Requisition or external documents such as Purchase order, contract, scheduling agreement.
228
Release procedure are of two types
Release procedure with classification Release procedure without classification
229
Demo1_Release Procedure with Classification
Creation of Characteristics
Grouping the Characteristics in a Class
Defining the Release Procedure
Definition of Release Group
Definition of Release Codes
Definition of Release Indicator
Creation of Release Strategies
Defining the Release Prerequisites
Specify the Release Status for each Release Code
Classification
Simulation of Release Strategy
230
Characteristics
Characteristics are the criteria upon which release condition are satisfied. Example - Plant, Account Assignment Category, Total Value, Material Group etc.
231
Objec To create different characteristics for the release tive procedure
Click on Edit Characteristics
232
233
234
235
Class
Class is used to group together characteristics that are used to constitute a release condition for release strategy.
236
Objec To group the Characteristics in a class tive
Click on Edit Class
237
Objec To group the Characteristics in a class tive
238
Release Group
It is the grouping of one or more release strategies. This permits multiple usage using the same release key. Example Release group 01 is defined for purchase requisitions and release group 02 for purchase orders. You can define release strategy S3 for both purchase requisitions and purchase orders.
239
Objecti To define a Release Group ve:
Click on Define Release Procedure
240
Objecti To define a Release Group ve: Click on Release Groups
241
Release Code / Point
It is a two-character ID given to a person to release (approve) a purchasing document. Example 01,02, or AA, AB, EN for Engineer, MG for Manager etc.
242
Objecti To define a Release Code ve:
243
Objecti To define a Release Code ve: Click on Release Codes
244
Objecti To define a Release Code ve:
Define Release Codes here and their descriptions
245
Release Status / Indicator
It is a code that represents a release status. The release status is the current standing of the item or the purchase document. Example If the proper approval has not yet been received, the release status would display as blocked. The status tells the system what is allowed for the item or document
246
Objecti To define a Release Indicator ve:
247
Click on Define Release Indicator
248
Define Release Indicators here
249
Release Pre requisite
It indicates the order in which individual release codes may release the purchasing document. Example 01,02,03 are release codes. 03 has prerequisite of code 02 and 01, which means 03 can release the document only if 01 and 02 have released it.
250
Objecti To define a Release Pre-requisite ve: Click on Release Strategies
251
Objecti To define a Release Pre-requisite ve:
Double Click on Release Strategies

252
Objecti To define a Release Pre-requisite ve: Click on Release Pre requisites
253
Objecti To define a Release Pre-requisite ve: Flag the release codes in the required sequence and click on continue
254
Objecti To define a the status of the purchase ve: document after each release
Click on
Release status Flag the Release codes
255
Objecti To define a the classification of the release ve: strategy Click on Classification
256
Objecti To define a the classification of the release ve: strategy
Give the
different values for the characteristics Click on the right arrow as indicated to go back to the release strategy screen
257
Release procedure without classification can be used only for
Purchase requisitions . This procedure has four preset characteristics namely A/c Assignment group, Material Group, Plant and Purchase requisition value.
In order for release procedure without classification to be

configured, the following must be defined.
Release codes Release indicators Assignment of release indicators Release prerequisites Determination of release strategy
258
Demo3_Release of a Purchase Order
Objecti To Release a Purchase Order ve:
259
Objecti To Release a Purchase Order ve:
Click on Individual release
260
261
P O released by all the release codes
262
Agenda
Pricing and The term Pricing is used broadly to Conditions describe the calculation of prices & costs. Conditions enables you to store pricing stipulations agreed with the vendor Duration 3 (Hours) Objective To be familiar with Pricing and Conditions PreInfo record requisites Material master Vendor master Purchase Order Note Fields in red boxes are mandatory fields. 263 Course Concept
Concept
Pricing
The term Pricing is used broadly to describe the calculation of prices & costs Pricing in SAP is triggered through principle of Condition Technique. Gross price Price excluding any possible discounts or surcharges Net price Price taking discounts, surcharges, and possibly taxes into account Effective price Net price plus delivery costs, cash discount, and miscellaneous provisions for accrued costs or rebates
264
Concept
Conditions
Conditions enables you to store pricing terms agreed with the vendor
Time dependent Condition

Validity periods and scales can be specified for these conditions.
Time independent depend Condition

No validity periods and scales can be defined for these conditions.
Condition technique
Specifies method by which the system determines prices from 265 information stored in condition record
Important Data for Conditions and Pricing

Key / Description
Control
PB00 Gross Price
Condition class Calculation Type Condition category Access sequence
: Prices : Qnty dependent : Base Price : Gross price
FRB1 Freight Absolute
Condition class : Discount/surcharge Calculation Type :Fixed amount Condition category : Delivery cost
SKTO Cash discount
Condition class Calculation Type Condition category
: Discount/surcharge : Percentage : Cash discount
266
Condition Technique
Access sequence It is a search strategy which searches for valid records of a certain condition types. Condition Type It represent pricing elements in the system, Example - percentage discounts ,freight costs, taxes or custom duties Condition Table A combination of fields that defines the key of a condition record.
267
Condition Technique
Calculation Schema A calculation schema groups together all condition types that play a part in calculating the price. It sets out the order in which the condition types are taken into account in the calculation. Schema Group Group of vendor or purchase organization that use same calculation schema.
268
Schema Determination
A predefined calculation schema can be determined for

Standard Purchase order Based on the schema group vendor and schema group pur org Stock transport orders Based on supply plant/pur org ,Document type and schema group purchase organization . Market price determination Based on the purchasing organization, a separate calculation schema can apply for the determination of the market price.
269
Schema Determination
Pur order
Schem a gr pur org
Schem a gr vendor
Calcul ation schem a
Pur org Vendor
1000 A
RM00 00
XM00 00 0001 0002 01 02 YM00 Vendor00A ZM000 0
270
Schema group 02
The condition group embraces a number of different materials supplied by a vendor to which a uniform discount or surcharge applies. The condition group is a freely definable, four-character, alphanumeric string that is assigned in the info record.
271
Info record Condition Group Vendor A Material 1 Condition Group XY Info record Vendor A Material 2 Condition Group XY Purchase Order Item Condition Group RGRO Vendor A Condition Group XY 2 % discount 10 Material 1 2 % discount 2 2 % discount Info record Vendor A Material 3 Condition Group XY 272 30 3 200 150 Price 100
Price Determination Process
When you create a PO, a contract release order, or a delivery schedule, the R/3 System searches existing documents for valid conditions and adopts it it as default values in the new document. The price determination process is carried out in a number of steps: First, the relevant calculation schema is determined. Then the system searches for condition records for all condition types listed in the calculation schema that have an access sequence assigned to them. The search for condition records is carried out in the order specified in the access sequence. The search is concluded when a valid condition record is found. 273
Price Determination Process : overview

Calculation schema Step 1 . . cond .type PB00 Pur org Vendor For Plant Material Condition Type : PB00 Access Sequence 0002 Condition Tables Access Sequence 0002 Condition Tables: 1. Contract item 2. Plant information 3. Info record . . Contract item No record exits Condition Tables 10 Pc 1000 A 1000 1 30.0 Purchase Order
Plant info record

Material 1 30.0 28.0 274
From 500 Pc
Header, Item & Group Condition
Header conditions are entered in the header of a document and relate to all the items of that document. Item conditions are conditions relating to a single item of a document. If the same condition occurs in different document items, the item values are added up and the result used as the basis for determining the scale level. If the condition type is entered at header level, the value is divided among the items
275
276
Condition Exclusion
Condition exclusion procedure: If several condition records are valid for price determination purposes, you can define rules specifying which condition records are to be chosen and which are not to be taken into account. An exclusion group is a list of condition types that are compared with each other during the price determination process and lead to the exclusion of an entire group of condition types or individual condition types within a group.
277
Condition Records & Condition Tables
Condition type PB00
Vendor material Pur org Plant Condition table A017 (info record with Plant )
------
Condition record No
1000
1000
------
1234
Condition type PB00
Condition - -out - - - - Plant) Pur org with material Condition Vendor table A018 (info record record No A
1000
------
4321
-----record No table KONP item type condition 1234 PB00 ------
Condition
Condition
Condition Amount 10.0 11.0
------
------
4321
PB00
------
------
278
Demo1_Customizing Conditions and Pricing
Object To create an Access Sequence ive

Select 002 for gross price and click on Access
279
Object To create an Access Sequence ive
280
Object To define Condition types ive
281
Object To define Condition types ive

Select PB00 And click on detail button
282
Object To define Condition types - Control Data ive
283
Object To maintain Condition tables ive
284

Select a table No. other then from the list Eg - 965
285

Select the Required field from the cat log and double click on it
286
Object To define Condition control at plant level ive
287
Object To define Calculation Schema ive
Select RM0000 And click on control
288
Object To define Calculation Schema ive
289
Object To defining a Schema determination ive

Select the calculation schema
290
Object To defining a Schema determination ive
RM0000 is calculation schema for standard PO
291
Object To defining a Schema Group ive

Double click on respective Schema groups
292
Objec Defining Condition Exclusion tive
Click for defining condition exclusion
293
Objecti Defining Condition Exclusion ve
294
Objec Defining Condition Exclusion tive
Assignment of Condition Exclusion to Condition Types
295
Objecti Defining Condition Exclusion ve
Assignment of Condition Exclusion to Calculation Schema
296
Demo2_ Creating purchase order
Objecti To observe the conditions in a purchase order ve

Header Conditions
297
Demo2_ Creating purchase order
Objecti To observe the conditions in a purchase order ve

Item conditions
298
Curriculum

299
Agenda
Goods Receipt
Duration (hours) Objective Prerequisites
Goods Receipt is the term used to describe an increase in warehouse stock due to receipt of goods from external vendors or from internal stock transfer 1
To get familiar with Goods Receipt Material Master Info Record 300
Goods Receipt
The term used to describe an increase in warehouse stock due to receipt of goods from external vendors, from internal stock transfer, as initial stock balance or for quality inspection.
301
Reference documents for Goods Receipt are
Purchase Order Order Reservation Inbound delivery Outbound delivery
302
Effects of a Goods Receipt
Stock & Consumption A/c updated Material & Accounting document created Stock and value updated in material master PO /PO history update QM lot created.
303
Demo1_ Goods Receipt for PO
Objecti Goods Receipt for PO (MIGO) ve
304
Agenda
Goods Issue
Duration (Hours) Objective Pre-requisites Course content
A reduction in warehouse stock due to a withdrawal of stock or the delivery of goods to a customer. 1 To get familiar with Goods Issue Purchase Order
Introduction Concept Goods Issue - General Note Fields in red boxes are mandatory fields. Demo1_Goods Issue Without
305
Introduction
A reduction in warehouse stock due to a withdrawal of stock or the

delivery of goods to a customer.
306
Features
The Inventory Management system supports the following types of goods issues:
Withdrawal of material for production orders Scrapping and withdrawal of material for sampling Return deliveries to vendors Other types of internal staging of material Deliveries to vendors without the involvement of the SD Shipping component
307
Purpose
Companies usually differentiate between various types of Goods Issues, each of which is handled in R/3 system as follows. Stock Scheduled for Delivery Material Withdrawals for Production Orders Other Types of Internal Staging of Material Return Deliveries to Vendors Scrapping/Sampling
308
Demo1_Goods Issue_ Without Reference
Objecti To post a Goods issue ve
309
Demo1_Goods Issue_ Without Reference
Objecti To post a Goods issue ve
310
Demo2_Goods Issue _ With Reference to Reservation
Object To post a Goods Issue With reference To ive Reservation
311
Demo2_Goods Issue _ With Reference to Reservation
Object Goods Issue With reference To Reservation ive
312
Results Of A Goods Issue Posting

A goods issue has the following results in the system.
Material document is created Accounting document is created Goods receipt/issue slip is created Stock update Update of G/L accounts Consumption update Reservation update Order update
313
Agenda
Transfer Posting
This component helps us to get an insight on the process of Transfer Posting.
Posting Master, Movement Note Fields in red Material boxes are mandatory fields. PreTypes
Duration Hr (Hours) Objective To get familiar with Transfer

314
Introduction
What do you mean by Transfer Posting?

What is the difference between a stock transfer and a transfer
posting ?
315
Concept
A Transfer Posting usually refers to a change in a materials stock
for example release from quality inspection, accepting consignment material, etc.
316
Demo1_Transfer Posting Process
Object To get to know the status of the Material ive
317
Object To get to know Quantity of Material in Quality ive Inspection and to transfer to Unrestricted use.
318
Object Transfer all the stock from Quality to ive Unrestricted use
319
Object Transfer all the stock from Quality to ive Unrestricted use
320
Object Observe the Stock Balances ive
321
Object Observe the Stock Balances ive
322
Agenda
Stock Transfer
This component helps us to get an insight on the Stock Transfer process.
of Stock Transfer Master, Movement Note Fields in red Material boxes are mandatory fields. PreTypes
Duration 1 Hr (Hours) Objective To get familiar with process

323
Introduction
What do you mean by Stock Transfer?

What are the levels at which the Stock Transfer can occur?
What are the different procedures for Stock Transfer?
324
Concept
Stock Transfers are components used to remove stock from one

storage location and place them in another storage location.
Depending upon the organization of the company and its sales

policy, internal stock transfers also might be necessary.
325
Stock Transfers can occur at 3 different levels
Stock Transfer from Company Code to Company Code Stock Transfer from Plant to Plant From Storage Location to Storage Location (within a Plant)
326
Stock Transfers can be carried out in 3 different ways
Stock Transfer using the 1 step procedure Stock Transfer using the 2 step procedure Stock Transfer using the Stock Transport order
327
Demo1_ Stock Transfer Plant to Plant -1 Step
Object Check for stock balance of Material, ive Fluconazole in Plant 1000
328
Object Check for stock balance of Material, ive Fluconazole in Plant 1000
329
Object To transfer 20 Qty of Material, Fluconazole ive from Plant 1000 to Plant 1100
330
Object To transfer 20 Qty of Material, Fluconazole ive from Plant 1000 to Plant 1100
331
Objec To check whether 20 quantity of Fluconazole is tive received in Plant 1100 after the stock transfer.
332
Objec To check whether 20 quantity of Fluconazole is tive received in Plant 1100 after the stock transfer.
333
Agenda
Reservation A request to the warehouse to keep materials ready for withdrawal at a later date and for a certain purpose. Duration 1 (Hours) Objective To get familiar with Reservation Prerequisites Course content Material master and Purchase Order.
Concept Demo1_Create Reservation
334
Reservation
Make a request to the warehouse to keep materials ready for withdrawal at a certain date and for a certain purpose. it simplifies and accelerates the Goods receipt process. A reservation for goods can be requested by various departments for various account assignment objects (such as cost center, order, asset, etc.).
335
Manual and Automatic Reservations
In R/3 system Manual reservations are entered directly by the user. In R/3 system Automatic reservations are generated automatically by two types. Reservations for orders, networks, WBS elements: The components from the warehouse are automatically reserved When an order, a network, or a project is created. Stock transfer reservations: The system generates a stock transfer reservation in the plant for the replenishment quantity when the available stock on hand falls below the reorder point If reorder 336
Concept
When a reservation is created in the system, the following activity takes place: In the material master record, total stock and unrestricted-use stock of the material remain unchanged. Reserved stock is increased by the reserved quantity. In MRP, available stock is reduced by the reserved quantity. This is visible in the current stock/requirements list. The reservation causes an entry to be made in the requirements planning file.
337
Creating a Reservation
In Inventory Management Choose, Reservation -> Create. The initial screen appears, Enter the following data: Base date Movement type Plant The collective entry screen appears. Enter an Account Assignment Some of the account assignment fields (for example, G/L account) need not be maintained manually. The relevant information is automatically copied from the account assignment object Enter a G/L Account If you do not enter an account, the system will automatically determine the G/L account when the 338
Creating a Reservation Using a Reference Document
You use this function to copy items from an existing reservation when entering a new reservation. When doing this, In Inventory Management Choose, Reservation -> Create. Enter the base date of the new reservation. Enter a movement type only if you want a movement type that differs of the reservation to be copied. Enter the reservation No. to be copied in the Reservation field (under Ref.). You can also choose Reservation -> Create w. reference To reference. The item selection screen is displayed. The list contains all items from the reference reservation. If necessary, change the account assignment. 339 Select the items to be copied to the new reservation. You can
Displaying a Reservation
Display an individual reservation (MB23) In Inventory Management Choose, Reservation ->Display. Display a list of all reservations(MB25) In Inventory Management Choose, Reservation -> Reservation list.
340
Changing a Reservation
Even after withdrawn the reserved quantity, You can change a manual reservation at any time. You can change the data (for example, quantity or storage location) directly on the collective processing screen. Alternatively, you can select one particular item and change the data on the detail screen You cannot change the account assignment data (for example, cost center or order). If the account assignment is incorrect, you must delete the reservation and enter a new reservation.
341
Demo1_Create Reservation
Objec To create a reservation tive
342
343
344
Agenda
Sub Contracti ng
Duration (Hours) Objective Prerequisite s
The vendor (the subcontractor) receives components from which he manufactures a product. The product is ordered in a purchase order. The components required by the vendor to manufacture the ordered product are listed in the purchase order and provided to the subcontractor 2 To become familiar with Sub-Contacting Info record, Material master 345 Vendor master
Sub-Contracting
This unit will cover
( Purchase order ) Sub-Contacting order Provision of parts for sub contracting Goods receipts and postings Posting a Subsequent Adjustment By-products in Subcontracting Subcontracting for Project and Sales order stock Scheduling Agreements with Subcontracting
346
Concept In subcontracting, the vendor (the subcontractor) receives components from which he manufactures a product. The product is ordered in a purchase order. The components required by the vendor to manufacture the ordered product are listed in the purchase order and provided to the subcontractor. The components can be determined by the system via a bill of material (BOM).
347
Creating a Subcontract Order
In PO screen, enter the material number which you want to order the
vendor and item category as L. Other entries as applicable for the PO. entered or by means of BOM explosion.
The components being supplied from the enterprise shall be manually

The requirement date of the material need not be entered which will be
automatically calculated by the system. i.e delivery date of the item minus planned delivery time.
348
Providing Components With No Order Reference
To post components from the unrestricted-use stock to the stock of material provided to vendor, proceed as follows: From the Inventory Management menu, select Goods movement Transfer posting. Enter the issuing plant ,storage location. &Choose Movement type Transfer posting Stock with subcontractor From unrestricted use Press ENTER. The collective entry screen appears. Enter a vendor and the individual items. Post the document.
349
Providing Materials From Another Vendor
If components to be provided to the subcontracting vendor are supplied

not by your company but by a third-party, you can order the components from the third-party and specify the subcontractor in the purchase order as the delivery address. At GR, the components are posted directly to the stock of the material provided to vendor.
To order components for a subcontract order from a vendor and have

them delivered direct to the subcontractor, enter a standard purchase order with a different delivery address
350
Providing Materials From Another Vendor
From the Purchasing menu, choose Purchase order Create Vendor known. Maintain the data on the initial screen. Make sure you enter the vendor of the components and the plant concerned. Enter the items. Then choose Item More functions Delivery address. A dialog box appears in which you enter the delivery address of the subcontractor. In the field Vendor, enter the number of the subcontractor and select the SC vendor box. Selecting the box causes the components at goods receipt to be posted directly to the stock of the material provided to vendor when the goods receipt is posted. 351 Save the purchase order.
Posting the Goods Receipt of the Components When the vendor delivers the end product (semi-finished item), you
post a GR for the subcontract order in the same way as for a standard PO. The system determines the components for each order item and creates a goods issue item for each component. the materials supplied by the vendor and Goods issue items for the components
As a result, the material document consists of Goods receipt items for

After you have copied an order item, you can change the quantities in
the goods issue items.
A goods receipt posting has the following results in the system:
the stock of material provided to vendor at plant level is increased. The stock of material provided to vendor is not managed at storage location level, since the stock is no longer stored at your company. Valuated stock at plant level increases.
352
Posting a Subsequent Adjustment
If the subcontractor informs you after these GR postings that a greater or smaller quantity of the components was actually consumed than planned in the purchase order, you must post a subsequent adjustment to correct the component consumption. If the component is a by-product, you must post the corrected byproduct receipt (excess receipt) or by-product issue (short receipt). When returning subcontracting components (under-consumption), the system checks that the quantity returned is not larger than the quantity originally transferred to the subcontractor. This check takes place on material and plant level.
353
Posting a Subsequent Adjustment
In the transaction goods movements MIGO, select the business operation Subsequent Adjustment from the list box. The system automatically chooses PO as the reference document. Enter the document number of the PO and the item number for which you want to post a subsequent adjustment. For the selected item, enter the difference quantity specified by the vendor and determine with the Under-consumption/Short Receipt indicator, whether a receipt or an issue is concerned. If you set the indicator, it is an under-consumption or short receipt. If you do not set the indicator, it is an excess consumption or excess receipt. Post the subsequent adjustment. The specified quantities of the originally posted GR are corrected 354 by the system to the subsequently adjusted quantities
By-Products in Subcontracting In the GR for the Sub-Contract purchase order, the system automatically posts the receipt of the by-products. (In the material document, you can identify the by-product items from their movement type 544. Note that the by-products are posted to the "stock of material provided to vendor, also referred to as "subcontracting stock"). The receipt can still be corrected using the Subsequent Adjustment function. Due to the receipt of the by-products, the value of the manufactured material is reduced. To transfer the by-products quantities from the "stock of material provided to vendor" (or subcontracting stock) to the unrestricteduse stock, you enter a transfer posting using movement type 542 (reversal of the provision of the components).
355
Subcontracting for Sales Order Stock and Project Stock
The subcontracting orders are account-assigned to a sales order or a WBS element. Thus, the components are not transferred (using a transfer posting) to the "stock of material provided to vendor" but are directly withdrawn from the sales order stock or the project stock at the time of the GR. The material manufactured is also posted to the sales order stock or to the project stock. The cost of subcontracting is then debited to the sales order or WBS element.
356
Entering Scheduling agreement and Delivery Schedules

To enter several delivery dates for a subcontract order item, Display the scheduling screen for the item and enter the quantities and dates.
If the ordered material has a bill of material, the components are

copied from the bill of material.
If you do not use bills of material, you must either enter the
components manually or refer to an existing purchase requisition. You have to enter the components for every delivery schedule.
357
Entering Scheduling agreement and Delivery Schedules

Position the cursor on a schedule line and choose Item Component Overview to display the screen for processing components. You can enter or change the individual components in the same way as an order item. To make entering the schedule lines easier, copy the components for other delivery schedule items. To do this, select Edit Repeat components Activate Save the delivery schedule. When you print the scheduling agreement, the quantity required per component and date required are reprinted.
358
Demo_1 Creating a Sub-contact PO

Objective To create Sub-Contracting Purchase Order
L Item Category for Sub-Contracting
To Enter a Components for Main material Click on Components Or click on Explode BOM
359
Demo_1 Creating a Sub-contact PO

Objective To enter components in the Sub contract PO
Enter components required for Main Material
360
Special stocks
Special stocks
Special stocks are stocks that are managed separately because, they do not belong to your company or being stored at a particular location
Duration 3 (Hours) Objective To become familiar with special stock PreInfo record, material master and vendor requisites master and Purchase order Course
Concept Consignment Stocks
361
Concept
Special Stocks
Special stocks are stocks that are managed separately, Because they do not belonging to your company or being stored at a particular location Special stocks and special procurement types are divided into the following areas. Consignment Third-party processing Returnable transport packaging Pipeline handling Sales order stock Project stock Subcontracting 362 Stock transfer using stock transport order
Consignment Stocks
The vendor provides materials and stores them in your premises. The vendor remains the legal owner of the material until you withdraw materials from the consignment stores. The advantage of this is that the companys liabilities increase only for the quantity withdrawn. Only then is the vendor required to pay. The invoice is due at set periods of time, for example, monthly.
363
Procurement of Consignment Material

You can procure consignment material via purchase requisitions, purchase orders and outline agreements for consignment material. Creating Purchase Requisitions for Consignment Material You enter purchase requisitions for consignment materials in exactly the same way as for other materials. You accept the order category (such as NB) that the system proposes as a default and enter the item category K (for consignment).
364
Creating Purchase Orders / Outline Agreements for Consignment Materials
The procedure for creating consignment orders is the same as for standard purchase orders or outline agreements. However, you must note the following Enter the item category K for the consignment item. Ensure that the goods receipt is posted to the consignment stores
Do not enter a net price in the Purchase Order
365
Goods Receipt for Consignment Purchase Order
From the Inventory Management menu, choose Goods movement
Goods receipt For purchase order PO number known. The initial screen is displayed.
Enter the purchase order number to which the goods receipt refers. You can also enter the plant and storage location.
Select the movement type with Movement type PO to warehouse. Press ENTER to display the item overview.
Select the items you wish to process and check the quantities delivered. If required, enter a stock type in column S. Copy (adopt) the selected items.
366
Goods Receipt Without Purchase Order

Choose Goods movement Goods receipt Other from the
Inventory Management menu.
On the initial screen choose Movement type Receipt W/o purchase order To consignment unrestricted. Enter the plant and storage location. Press ENTER to display the collective entry screen. Enter the vendor number. Enter the number and quantity of the consignment material. Post the goods receipt.
367
Updating of Consignment Stock
After a GR for consignment material has been posted, the consignment stock of the material increases &This is stock is available for MRP. However, the material's valuated stock does not increase since the consignment stock still belongs to the vendor.
368
Consignment Stocks
Displaying the stock overview

From the Inventory Management menu, choose Environment Stock Stock overview. Maintain the data on the initial screen and carry out the evaluation. An overview is displayed of your own stock and the consignment stock according to your selection criteria.
Displaying consignment stocks

This function allows you to display the consignment stocks. From the Inventory Management menu, choose Environment Consignment
Vendor consignment Stock. Maintain the data on the initial screen and carry out the evaluation
369
Goods Issue from Consignment Stock
You can only post a goods issue from consignment stock to consumption, if the material belongs to unrestricted-use stock. If the consignment material is in quality inspection or blocked stock, you must first transfer it o the unrestricted-use stock. From the Inventory Management menu, choose Goods movement Goods issue. Enter the data as required, including movement type, account assignment object.
After the goods issue, the vendor is due the net value of the goods issue.
370
Transferring Consignment Stocks
From the Inventory Management menu, select Goods movement Transfer posting. The initial screen is displayed.
type
Enter the plant and the issuing storage location. Choose Movement Transfer posting Consignment SLoc unrestricted use. To unrestricted use. (It is also possible to transfer quality inspection stock or blocked stock). Press ENTER. The collective entry screen appears. Enter Receiving storage location, Vendor, Material and Quantity. Post the stock transfer.
The transferred quantity is now managed in the consignment stock 371 of the receiving plant.
Settling Consignment Liabilities
Removing material from consignment stores or transferring material to your companys own stock results in liabilities towards the vendor. You should settle these liabilities at regular intervals. Consignment materials are settled without the vendor issuing an invoice. The vendor can only manage its consignment stock by taking deliveries and payments into account. You settle posted withdrawals and return deliveries yourself in logistics Invoice verification and send the vendor a statement of the settlement. You can perform this settlement periodically in the background. The documents involved are 372 Invoices and Credit memos.
Pipeline Stocks
A pipeline material is a material that flows directly into the
production process from a pipeline (for example, oil, tap water, electricity). the pipeline material is always available, i.e. it can be withdrawn from the pipeline at any time and in any quantity. They are not stored or kept in stock. No physical inventory is taken. Pipeline movements are mandatory in all valuation areas; i.e. no other goods movements may be posted.
Creating a Pipeline Material

When creating a pipeline material, it is important that you note the following: Assign the material to material type PIPE that allows pipeline movements. 373
Creating a Pipeline Info Record
You determine the price of a pipeline material from a vendor in a

pipeline info record. You create a pipeline info record as follows:
From the Purchasing menu, choose Master data Info record

Create.
Select the info category Pipeline & On the initial screen enter the
vendor, material and standard purchasing organization assigned to the plant.
Maintain the info record data and save.
374
Maintaining the Source List
If only one pipeline info record has been defined, Then it

appears as a default when you post goods movements.
If you have more than one pipeline info record for a material,
you can enter the preferred vendor in the source list. This vendor then appears as a default when you enter goods movements. If no vendor has been entered in the source list, you have to select a vendor with every goods movement.
375
Posting Goods Issue from the Pipeline
A withdrawal from the pipeline is posted as follows:

From the Inventory Management menu, choose Goods
movement Goods issue.
Maintain the data on the initial screen. Choose Movement

type Consumption To cost center (or order, network, account assignments) From pipeline (Movement types :
201 P, 261 P, 281P, or 291 P)
You do not have to enter the vendor If more than one vendor exists, a pop-up window appears
376 with a list of pipeline vendors, from which you can select the
Pipeline Stocks
A Goods Withdrawal from the pipeline results in the following updates in

the system:
The vendor liability that must be settled periodically in a similar

way to the management of consignment stocks.
A consumption history is kept. The pipeline withdrawal has no effect on existing warehouse
stock or on the availability of the material.
377
Settling Pipeline Liabilities
If pipeline and consignment liabilities are to be posted to the

same account, you have to settle consignment and pipeline liabilities together.
If pipeline and consignment liabilities are to be posted to

different accounts, you settle them separately.
You settle pipeline liabilities for a vendor in the same way that
you settle consignment liabilities.
378
Third party Stocks
Third-Party Processing In third-party processing, you place a purchase order with a vendor to deliver goods or perform a service for a customer (third party). This means that your company forward the order to an external vendor who then sends the material directly to the customer and invoices you. Company
PO
Order
Customer
Delivery (Goods )
Vendor
379
Third party Stocks
Third-Party Processing in Sales If a material can only be procured externally, you can specify it in the material master record that it is always processed as a third-party item when a sales order is processed. Resulting Activities in Purchasing A purchase requisition is automatically created when a Sales Order is created If a third-party item from the sales order calls for more than one delivery schedule, the system creates a purchase requisition item for each individual quantity. The number of the purchase requisition is updated in the sales order. The item is scheduled automatically. The delivery time required by the vendor and the processing time in Purchasing are taken into account.
380
Creating a Third-Party Item Manually
If you do not use SD, you can plan a third-party business transaction using a purchase requisition as follows
Enter the item category S and an account assignment category Enter the account assignment data (for example, the number of
the G/L account). Which account assignment data you have to maintain depends on the account assignment category.
Save the purchase requisition.
381
Third party Stocks -Purchase Order
A third-party order is usually created referencing a third-party
item in a purchase requisition. You can create purchase orders in this way individually or collectively. If you do not use SD and have not entered a purchase requisition, you can also enter a third-party order manually. Enter a third-party item manually in the same way as the purchase requisition. After entering the account assignment, you can see a screen in which you can enter the address of the sold-to party. Enter either the customer number or a delivery address. Check whether goods receipts can be made for the third-party item. Goods receipts are possible if the goods receipt indicator is set in the item. Save the purchase order.
382
Third party Stocks
Third-Party Processing in Inventory Management

Third-party order involves a movement from the vendor direct to
the customer, Inventory Management is not in any way affected. If you want to document the movement in the system, you can create a GR for the third-party order.
Entering a Goods Receipt ( GR ) You enter a GR for a third-party order in the same way as a
standard GR for a PO with account assignment.
Results of the Goods Receipt.
No stock update is made, as the GR is posted to consumption.

The value of the purchase order is posted to a GR/IR clearing 383
account for the purposes of Invoice Verification.
Third-Party Processing in Invoice Verification
When the vendor invoice arrives, You enter the invoice in the
same way as an invoice for a standard PO, for the third-party order also.
If you posted a statistical GR for the PO, the invoice receipt
results in an offsetting entry on the GR/IR clearing account, which is cleared.
If the customer is to be billed in SD based on the invoice
quantity specified in the vendor invoice, this quantity is used as the basis for the billing document in SD. The billing document can only be posted once the vendor invoice has been posted.
384
Returnable Transport Packaging (RTP) Stock

It is a multi-trip packaging medium (for example, pallets or containers) in which goods can be transported more than once between vendors and customers. RTP from a vendor that is stored at your premises is managed as special stock and clearly assigned as belonging to the vendor. It is the property of the vendor and is therefore not included in the customers valuated stock RTP stock is always unrestricted-use stock. The stock can neither be in quality inspection nor blocked To enable you to manage the returnable transport packaging stocks of material belonging to different vendors separately, special stock data is required in addition to material master data. This special stock data is defined for every vendor at the storage 385 location level.
Posting Other Goods Receipts to RTP Stock
From the Inventory Management menu, choose Goods movement Goods receipt Other. The initial screen for this function appears.
Two movement types are available for goods movement for material with RTP: When a receipt is not for a purchase order, choose Movement type Receipt W/o purchase order To RTP unrestr. (501 M)
When stock balances are entered for the first time, choose
Movement type Receipt Initial stock entry (ext) To RTP unrestricted (561 M) vendor and enter the items.
Maintain the data on the collective entry screen i.e., enter the Post the goods movement.
386
Posting RTP Quantities at Goods Receipt for Purchase Order A quantity of RTP can be entered at GR for a PO as follows: From the Inventory Management menu, choose Goods
movement Goods receipt For purchase order PO number known / PO number unknown. On the initial screen enter the movement type (usually 101) and the order number. From the overview screen, choose Edit W/o purchase order. A window appears in which you can enter the movement type and the special stock indicator (e.g. 501 M) for the quantity of RTP. Enter the RTP items and post the Goods Movement.
387
Stock Updates This goods movement results ,increase in the unrestricted-use
RTP stock from the vendor. The total valuated stock remains unchanged.
Displaying Returnable Transport Packaging Stock RTP stock can be viewed using the following functions: Stock overview Plant stock availability Both functions can be found in the Inventory Management
menu under Environment Stock stock overview
388
Sales Order Stock
Stock that is used for a sales order and materials can only
be produced or procured only when they are ordered by the customer and the finished product can only be delivered to the customer via the sales order. You can manage valuated or non-valuated sales order stock.
Sales order stock is not valuated, if it is managed via a cost
collector. The system does not carry out invoice verification postings for goods until the end of the settlement period in Controlling.
If sales order stock is valuated, you can access its value in
Financial Accounting. The assigned accounts are debited and 389 credited as a result of the valuated goods movements.
Entering Goods Movements
When you enter a goods movement for sales order stock, you
should consider the following:
When you enter a goods movement with reference to a
purchase order or a production order, the sales order number and item are copied from the reference document. When you enter other goods movements, you must specify the sales order umber and item. Goods movements for sales order stock are entered as follows
Enter the relevant movement type with the special stock

indicator E and the sales order number and item.
390
Transfer to own stock
On the initial screen, enter movement type 411 and the special stock indicator E. This movement allows you to change the material number. This is required if the material is not managed in valuated stock (for example, configurable materials).
Goods receipt for purchase order/for order:

Enter a goods receipt for a purchase order or for an order as usual using the movement type 101. If an item is assigned to a sales order (account assignment category E), the system automatically sets the special stock indicator at GR.
391
Project Stock
Quantity of Material which is kept in stock for the completion of a project. The project stock is allocated to a work breakdown structure (WBS) element and the items can only be withdrawn for the WBS element. You can manage valuated or nonvaluated project stock.
If the project stock is not valuated, it is managed via a cost collector. The system does not carry out invoice verification postings for goods movements, until the end of the settlement period in Controlling.
If the project stock is valuated, you have immediate access to its value in Financial Accounting. The assigned accounts are debited and credited as a result of the valuated goods movements. Project stock is available for the project from an MRP point of view. 392
Project Stock
Creating Valuated Project Stock

If you want to work with valuated project stock, in the Accounting view of the material master record you can define your own Valuation Classes and thereby create your own stock accounts under Project Stock valuation class. Display the valuated project stock. Choose Environment Stock Valuated special stock.
Entering Goods Movements
When you enter a goods movement with reference to a purchase order or production order, the WBS element is taken from the reference document. When you enter other goods movements, you must specify the 393 WBS element manually.
Project Stock
Goods movements for project stock are entered as follows:

Other goods receipts, goods issues, transfer postings: Enter the relevant movement type with the special stock indicator Q and the WBS element.

Transfer to own stock: Enter movement type 411 and the special stock indicator Q. Goods receipt for purchase order/for order:
Enter a goods receipt for a purchase order or for an order as normal using the movement type 101. If an item is assigned to a project (account assignment category Q), the system automatically 394 sets the special stock indicator at GR.
Demo_ Create consignment Info-record

Menu Path T.Code Materials management Purchasing Master data Info-record create ME11
Select Info-Record Category as Consignment
395
Demo_ Procuring consignment Material

Menu Path
T.Code
Materials management Purchasing Purchase Order Create Vendor/Supply Plant Known

ME21N
Select Item Category K For Consignment stock Procurement
Net Price Must be Zero
396
Demo_ Goods Receipt for consignment Material

Menu Path Materials management Inventory Management Goods movement Goods Receipt GR for purchase Order
MIGO
Select Mov.type 101 and Special stock indictor K
T.Code
397
Demo_ Create Returnable Transport Packaging Material (RTP)

Menu Path T.Code Materials management Material Master Create General Immediate MM01
Select Material type as Returnable package
398
Demo_ Create Pipe line material Menu Path T.Code Materials management Material Master Create General Immediate MM01
Select Material type Pipe line Material
399
Demo_ Create purchase requisition for Third party

Menu Path T.Code Materials management Purchasing Purchase requisition Create ME51N
Here we need to Enter Customer Address to whom the material is to be Supplied
Select item Category S
400
Demo_ Create purchase Order for Third party

Menu Path T.Code Materials management Purchasing Purchase Order Create ME21N
Select item Category S
Here we need to Enter Customer Address to whom the material is to be Supplied
401
Agenda
Inventory Management Customization Duration (Hours) Objective Pre-requisites Course content
This Part shows the customization of Inventory Management
8
To get familiar with Customization part of Inventory Management
Inventory Management
Customization
402
Inventory Management Customization
Objecti Inventory Management Customization ve
403
Objecti Define Plant Parameters ve
404
Objec Define Attributes of System Messages tive
405
Number assignments
Objec Define Number Assignments For Goods tive Receipt/Issue Slips
406
Field Selection for Goods Movements Initial /Header Screens
Objec Field Selection for Goods Movements Initial tive /Header Screens
407
Field Selection For MIGO
Objec Field Selection For MIGO tive
408
Field Selection Per Movement Type
Object Field Selection Per Movement Type ive
409
Create Storage Location Automatically
Object Create Storage Location Automatically ive
410
Define Screen Layout
Objecti Define Screen Layout ve
411
Allow Negative Stocks
Objec Allow Negative Stocks tive
412
Set Tolerance Limits
Objec Set Tolerance Limits tive
413
Create Purchase Order Automatically
Objec Create Purchase Order Automatically tive
414
Set Delivery Completed Indicator
Object Set Delivery Completed Indicator ive
415
Set Missing Parts Check
Object Set Missing Parts Check ive
416
Record Reason For Goods Movements
Objecti Record Reason For Goods Movements ve
417
Copy, Change Movement Types
Objecti Copy, Change Movement Types ve
418
Change Movement Types
Objectiv Change Movement Types e
419
Curriculum

420
Agenda
Invoice The main task of the Invoice verificatio Verification component is to n complete the procedure of materials procurement by posting the vendor invoice and to pass on information concerning the invoice to Financial Accounting and subsequent applications. Duration 1 (Hours) Objective To get familiar with Invoice 421 Note Fields in red boxes are mandatory fields. verification
Concept
Your Company receives a large number of invoices from the vendor

everyday. The data on the invoice is based on the Purchase order.
You want to review the data on the invoice sent by the vendor.
422
Exchange rate differences
Exchange rate Purchase order is entered in foreign differences currency, the amounts are translated from foreign currency into local currency at goods receipt. If you enter the invoice for the purchase order in the foreign currency, this can lead to currency translation differences between the goods receipt and the invoice receipt. Duration 1 (Hours) Note Fields in redTo boxes mandatory Objective get are familiar with fields. Exchange rate 423
Introduction
What are Exchange rate differences ?
Are you following Fixed exchange rate or Current Exchange rate ?

How does your company post these exchange rate differences ?
424
Concept
Purchase order is entered in foreign currency, the amounts are
translated from foreign currency into local currency at goods receipt. If you enter the invoice for the purchase order in the foreign currency, this can lead to currency translation differences between the goods receipt and the invoice receipt. These differences are called as Exchange rate differences.
According to business policy We can use :

fixed exchange rate current exchange rate
425
Concept
If the exchange rate is fixed in the Purchase Order, the R/3 system
uses this exchange rate to convert the foreign currency to local currency at goods receipt and at invoice receipt.
If the Exchange rate is not fixed in the Purchase order, the R/3
system uses the current exchange rate to convert the foreign currency to local currency goods receipt. In Invoice verification , it also suggests the current exchange rate.
The exchange rate differences are same as the Price differences.
The way that R/3 system posts exchange rate differences depends on the settings in the customizing for invoice verification.
426
Demo1_Fixed Exchange Rate
Object To fix Exchange rate at Purchase order ive
427
Demo1_Fixed Exchange Rate
Object To make a Goods receipt for fixed exchange ive rate PO
428
Demo1_Fixed exchange rate
Object Logistics invoice verification ive
429
Demo1_Fixed exchange rate
Object Purchase order history ive
No differences exist between GR and LIV
430
Demo2_Current Exchange Rate
Object To Create a Purchase Order without fixed ive Exchange Rate
431
Demo2_Current exchange rate
Objecti Goods receipt for PO ve
432
Object Logistics invoice verification ive
433
Object Purchase order history ive
We observe difference between the GR and IR
434
Demo3_Customizing setting for Exchange rate differences
Object Customizing for How the exchange rate ive differences are treated
435
Demo3_Customizing setting for Exchange rate differences
Object Customizing for current exchange rate ive
436
Information on a Invoice
Invoicing Party
Addressee Reference Purchase order Price per unit Material Details Invoice amount
Unit of measure Terms of payment
437
MM overview of Invoice Verification
Material Planning
Internal Procurement External Procurement
Stock transfer Goods receipt along with invoice Invoice Verification MM Invoicing doc & FI invoicing doc
Vendor
438

Invoice receipts
Invoices can be posted in the R/3 System in several different ways. The company receives invoices by post, then an employee enters and posts them. The company receives invoices via electronic transfer and the R/3 System posts them automatically (if the information transferred matches that expected by the R/3 System). The R/3 System creates invoices using settlement programs that run at regular intervals (evaluated receipt settlement, invoicing plan, consignment settlement). 439
Account Movements
In the case of material with a moving average price, the R/3 System posts the stock account with the value of the net order price multiplied by the quantity of goods received.
In the case of material with a standard price, the R/3 System posts the stock account with the value of the standard price multiplied by the quantity of goods received. The R/3 System posts the difference to an account for expenses or revenue from price differences.
440
Basic Invoice verification procedure
Purchase order based Invoice verification
Good receipt based Invoice verification
441
Basic Invoice verification procedure P. O based invoice verification

Delivery 1- 50pcs Delivery Note No:GR1 Purchase order Material XXX Qty-100pcs
Delivery 2- 25pcs Delivery Note No:GR2

Delivery 3- 25pcs Delivery Note No:GR3
Item list Po: XXX 100pcs
Selection via PO
Invoice for PO: XXX Qty:25
442
Basic Invoice verification procedure G.R based invoice verification

Delivery 1- 50pcs Delivery Note No:GR1 Purchase order Material XXX Qty-100pcs Delivery 2- 25pcs Delivery Note No:GR2 Delivery 3- 25pcs Delivery Note No:GR3
Item list Po: XXX 25pcs
Selection via Delivery Note
Invoice for PO: XXX Qty:25
443
Other Functions in Invoice verification

Simulating the posting Hold Documents Search for allocation Error Log
Environment Information
Note last setting
Communicatio n with vendor

444
Demo1_Invoice Verification
Objecti Purchase order based Invoice Verification ve
445
Objecti Purchase order base Invoice Verification ve
446
447

Simulate
448
Post
449
Objecti Purchase order base Invoice Verification ve

Save
Document Gets created
450
Agenda
Delivery Costs
To Understand about the Delivery cost PrePurchase Order, Note Fields in red boxes are mandatory fields. Goods Receipt requisites 451
Delivery costs are costs that are invoiced for a delivery over and above the value of the delivery itself
Introduction
Define Delivery Cost What are the types of Delivery Cost
452
Concept
Delivery costs are costs that are invoiced for a delivery over and
above the value of the delivery itself. This includes freight charges, customs duty, or other costs.
453
Types Of Delivery Costs
There are two types of Delivery costs Planned Delivery cost Un planned delivery cost
454
Demo1_ Enter Incoming Invoice
Objec Posting of Planned Delivery Cost tive
455
Demo2_ Enter Incoming Invoice
Objec Posting of Unplanned Delivery Cost tive
456
Agenda
Invoice block
Duration (Hours) Objective To know about Invoice Block PrePurchase Order requisites Note Fields in red boxes are mandatory fields. 457 Course Introduction
Invoice block means Financial Accounting cannot pay the invoice. 1
Introduction
What do you mean by Invoice Block

What are the reasons for Payment Block
458
Concept
Invoice block means Financial Accounting cannot pay the invoice.

Invoice blocking can be done either automatically or manually.
459
Reasons for Invoice Block
Variance in an Invoice Item Amount of an invoice item Stochastic Block Manual Block
460
Objec To Create Reasons for Blocking Payment tive
461
Objec To Set a Tolerance Limit tive
462
Objec Activate Block Due To Item Amount tive
463
Objec To Create Stochastic Block Values tive
464
Demo2_Enter incoming Invoice
Objec Entering incoming Invoice tive
465
Demo3_Releasing the Blocked Invoice
Objec Releasing The Blocked Invoice tive
466
Agenda
Invoice verificati on in Backgro und
The system checks the invoice with hundreds of line items the system should compare total invoice amount to the expected value from the purchase order using background processing.
Duration 1 (Hours) Objectiv To get familiar with Invoice verification 467 e in background
Concept
For invoices with hundreds of line items the system should compare total
invoice amount to the expected value from the purchase order using background processing.
The system checks the invoice in the background. If no errors occur, the
system also posts the invoice in the background. If errors do occur, the system saves the invoice and you then have to process it in a separate step.
468
Concept
The Invoice document which is saved does not contain any line items,
hence no item check is required.
The settlement program which is regularly started in the background
creates the item for this invoice document based on quantities and values to be invoiced. The system check if the total of the items and the amounts already set (gross invoice amount, tax amount, unplanned delivery costs) results in a zero balance.
469
Important data
Document header data :

Document date Posting date Gross invoice amount Tax information.
Program name:
Invoice Verification in the background is run using program RMBABG00.
470
Customizing Settings (For status)
Objectiv To set the indicator for invoice status. e
471
Demo2_Create invoice document in background
Objectiv To create a invoice document entry in e background
472
Agenda
Evaluated Receipt Settlement
Evaluated Receipt Settlement allows you to settle or pay for the goods receipt without entering or processing of an Invoice.
Duration Objective
Pre-requisites
Course content
1 hr To get to know the process of Evaluated Receipt Settlement Knowledge about Material Master, Vendor Master, Info Record, Purchase Order & Goods Receipt Concept Evaluated Receipt Settlement Process Benefits of Evaluated Receipt Settlement Demo1_Evaluated Receipt Settlement 473
Concept
Evaluated Receipt Settlement (ERS) allows you to settle or pay for

good receipts without entering or processing an invoice.
This eliminates the need to handle and process invoices received

from vendors.
The use of ERS is a continuing drive of the business industry. Its

success is predicated on accurate pricing and receiving.
While no invoice is received (either manually or via EDI) SAP
creates an internal invoice during execution of the ERS program.
474
Process
Based on the order price specified in the purchase order and the
quantity entered on the goods receipt, SAP determines the correct invoice amount and obtains tax information and terms of payment from the purchase order..
This information allows the system to settle without having to

process a vendor invoice.
475
Benefits
No GR/IR entries to clear.

No Blocked invoices to clear.
No invoices to process, benefiting you and your vendor.
476
Demo 1_Evaluated Receipt Settlement

PROCESS FLOW
Customization Settings for Vendor Master
Creation of Info Record
Creating a Purchase Order
Posting the Goods Receipt
Evaluated Receipt Settlement
477

Objective Make settings in the Vendor Master to enable Evaluated Receipt Settlement.
Mandatory Fields
478

Objectiv Make settings in the Info Record to enable Evaluated Receipt Settlement. e
Mandatory Field
479

Object Make settings in the Purchase Order to enable Evaluated Receipt Settlement. ive
Mandatory Fields
480

Objec tiv e To receive the goods that we have purchased from the Vendor.
Mandatory Fields
481

Objec tiv e To settle the account of the vendor without generating the invoice
Execute (F8)
482

Object ive This screen shows the list of ERS purchase orders to be executed
Note the Purchase Order & Vendor
483
Period closing and opening
Period closing and opening
Duration (Hours) Objective Pre-requisites
This function sets the new period, making it possible to perform goods movements with reference to the new period. Once the period has been closed, it is no longer possible to make postings to what was the previous period 1 To get to know about the period closing and opening 484 Material master
Introduction
What is meant by period closing and opening ? How it is related to Financial accounting and Materials management
?
485
Concept
Open and Close period for material postings. Once the
system is in productive operation, you normally run the period closing program once a month at the beginning of a new period. This program sets the new period, making it possible to perform goods movements with reference to the new period. Once the period has been closed, it is no longer possible to make postings to what was the previous period
486
Demo 1_Period closing
Objectiv Period closing in material mater record e
487
Demo 2_Period opening
Objectiv Period Opening in material mater record e
488
Logistic Invoice Verification Duration
Agenda
Verification of in coming invoices in the R/3 system before posting to finance
2 (Hours)
Objective
Prerequisites
To get familiar with LIV

To be well familiar with the earlier purchase master data, vendor master. Purchase order and Goods receipt
489
Concept
Logistic invoice verification

LIV is a part of MM. In LIV, incoming Invoices are verified in terms of their content , price & arithmetic . When Invoice is posted , the invoice data is saved in the system . System updates data in MM & FI LIV completes Material procurement process which started with PR . LIV allows to post Invoices that dont originate from MM . EX : Services , Expenses , Training cost etc It allows credit memos to be processed.
490
Concept
Incoming Invoice
Invoice contains various information such as Who issued Invoice Which transaction does the Invoice refer to How much tax do you have to pay You will allocate the Invoice to a business transaction , if such reference exist , the system uses knowledge that it already has & proposes the appropriate values during Invoice verification. For Example: 491 Terms of Payment
Concept
Invoice can be processed in LIV in following ways

Invoice Verification Online Parking Invoice verification in Background Automatic Settlements like: ERS Consignment & pipe line Settlements Revaluation Invoicing Plans EDI Invoices
492
Important Data for LIV
Maintain Number Assignments for Accounting Documents

In this step, you: Define the document types Assign each document type to a number range Assign document types to the Logistics Invoice Verification transactions Standard settings In the standard system, two document types are defined for Logistics Invoice Verification: RE for gross posting RN for net posting
493
Important Data for LIV
Tax Treatment in Invoice Reduction

Here, you can configure how taxes are to be posted for invoice reduction. The system creates two accounting documents for invoice reduction. The first document (original document) contains the invoice data sent by the vendor. The second document (complaint document) contains information about the invoice reduction. If the tax reduction is carried out in the complaint document, the taxes in the original document correspond to those in the vendor invoice. The tax amount for the invoice reduction is credited in the complaint document. If the tax reduction is carried out in the original document, the taxes in the original document are reduced by the tax amount for the invoice reduction. In this case, the complaint document494
Objective
Demo1_Customizing LIV
To create document types for invoice verification
495
Objective To assign number ranges for the document types
496
Objective To assign number ranges for the document types
Select Document type from list RE - Goss posting RN - Net Posting
497
Objective To assign Doc types to T Code
Assign required Doc type To Relevant T,code
498
Object To assign No. range to Transaction ive
499
Objective To Set Tax reduction doc to company code
Here we can set Tax reduction doc as a original or Complaint Document
500
Object To Set Default Tax code to company code ive

Select the required Company code and Click on Detail button
501
Object To Set Default Tax code to company code ive

Select required Tax code From the list
502
Objective To mail purchasing when price variance occurs.

Select the indicator For activate mail to Purchasing with respect To company code
503
Objec To configure vendor specific tolerances. tive
504
Objec To configure vendor specific tolerances. tive
505
Objec To activate direct posting to G/L account and tive material account
Select both indicator For activate G/L and Material account
506
Objec To Set Check for Duplicate Invoice tive
507
Demo2_ Creating Invoice Entry
Objec To create an invoice entry tive
508
Curriculum

509
Agenda
Name
Valuation and Automatic Account Assignment Duration 8 hrs Objective To update the knowledge of the audience with the concepts of Material valuation, configuration settings and concepts of Split Valuation & Account Determination. Prerequisite Material Master Vendor Master Purchase Order Goods receipt 510
Material Valuation Material Valuation is a part of MM module. This includes the following application areas: Purchasing Inventory Management Logistics Invoice Verification Material Valuation determines & records the stock value of a material. [ Stock value=stock qty*material price ]
Material valuation is not an independent application area, since most
valuation functions take place automatically in the SAP system. Material Valuation represents an integration between MM & FI modules since it updates the G/L accounts in Financial accounting. Material Valuation serves the following purposes: Adjusting material prices to market price. 511 Perform revaluations
Material Valuation
Control of material valuation is done basically by 2 factors: System settings At which levels are materials valuated. Which types of goods movements affect material valuation. Which G/L accounts must be posted with the material value during a transaction.
Material master record
As a rule every material in the SAP organization should have a Material Master. This master record also controls the valuation data of the material (Accounting view in the material master)
When maintaining Material master you must decide the following: a) Whether the material is to be valuated at all. b) Whether different sub stocks of a material should be valuated differently. c) Whether the stock of a material should be valuated at a constant price (standard price) or delivered price (Moving average price). 512
Material Valuation
Data on a material is valuated using the following structures: Valuation area Valuation category Valuation class Valuation type Material type Movement type The following control features are important for valuation. Does the material movement cause the quantity to be updated. Does the material movement cause the value to be updated. Does the material movement lead to posting in Financial accounting. Is the material movement relevant for LIFO/FIFO valuation 513
Split Valuation
Split valuation enables you to valuate stocks of a material in different ways

For example, according to external procurement or in-house production or by batches, or a material bought from two countries.
514
Split Valuation
Split Valuation Type of procurement Country of origin Quality status
Ext. procurement (H1)
In house mfg (H2)
New (Q1)
Used (Q2)
Reworked/Repaired (Q3)
India (C1)
Germany (C2)
515
Split Valuation The Valuation Area is the level at which materials are valuated, this corresponds either to a certain plant or to all plants belonging to company code. If you have set the valuation level at company code level, G/L accounts can also be assigned according to plant.
Valuation Category is the criteria on which material is Split valuated. Valuation Type describes the characteristics of a Valuation Category.
516
Split Valuation
Objec To configure split valuation tive
517
Split Valuation
Objec To define global categories tive
518
Split Valuation
519
Split Valuation
520
Split Valuation
Objec To define valuation types tive
521
Split Valuation
Objec To define valuation types tive
522
Split Valuation
Objec To define local categories tive
523
Split Valuation
Objec To create a material master with split valuation tive
524
Split Valuation
Objec To create a material master with split valuation tive
525
Account Determination
When entering the goods movement, the user does not have to enter a
G/L account, since the SAP System automatically finds the G/L accounts to be posted. This is called as automatic account assignment.
This is done based on the following data

Chart of accounts for the company code Valuation grouping code for the valuation area Transaction key Account grouping Valuation class
526
Objec To define a valuation grouping code tive
527
Objec To define account category reference and tive valuation class
528
Value string: It is an internal procurement key which facilitates automatic account determination.
Transaction event key: Internal processing key facilitating automatic account determination for the various material and invoice postings. Posting rule determines how the system has to capture the G/L account. There are 4 posting rules 1) Debit/Credit 2) General Modification 3) Valuation Modification 4) Valuation Class
529
Account Determination Account modifiers are general modification and has been defined in the SAP R/3 system for the following transaction or event keys:
GBB-offsetting entry for inventory postings PRD-cost (price differences) KON-consignment/pipeline liability
In MM in the standard system, a/c grouping is only active for the transaction key GBB. We can change the account grouping for transactions in IM, depending on the movement type and other indicators ( ex: special stock indicators). The account grouping cannot be changed for transactions in LIV.
530
Objec To define Automatic Account postings tive
531
Inventory Management Transaction Posting string for values PRD Invoice Verification
BSX
Transaction
300000
G/L account Number
281000
532
The posting transactions for the transactions in Inventory Management & Invoice Verification that are relevant for accounting are fixed. Posting records are assigned to each relevant movement type in IM and to each transaction in LIV. These posting records are generalized in a value string (posting rule). Instead of fixed G/L account numbers, this contains keys for the respective posting transaction (such as BSX for a stock posting and PRD for a price difference posting).
You do not need to define these transaction keys, the R/3 system determines them from the transaction (in LIV) or from the movement type (in IM). We only 533 need to
Curriculum

534
Batch Management
To familiarise Batch Management technique pertaining to Materials Management Pre-requisites Master data, Purchasing, Note Fields in red boxes are mandatory fields. Inventory Management
Batch Management Duration (hours) Objective
Batch Management in MM
1
535
Purpose
Need for Batch Management
In various industries, particularly the process industry, you have to

work with homogenous partial quantities of a material or product throughout the logistics quantity and value chain.
536
Batch Management
Application of Batches in SAP areas
537
Batch Management
Batch Number Assignment

This function is used to assign a unique key to a batch. The batch number uniquely identifies a batch in the SAP System. The batch level you choose determines the area in which the batch number is unique.
538
Batch Management
Batch Specification
This function is used to describe each batch uniquely using characteristics and characteristic values. You specify the permitted value range in the allocated material master record.
Batch status management

This function is used to indicate whether a batch is usable or unusable. You set this status: Manually in the batch master record or at GR Automatically in the usage decision in quality management The basic setting required is that Batch management box should be checked in Material master.
539
Batch Management
Deleting a Batch Master Record Flag a batch master record for deletion so that the archiving and deletion program can delete it. To do so, call the batch master record in change mode. You can set a deletion flag at plant level or at storage location level, but only if a deletion flag has not already been set at a higher level. The batch master record is then deleted at that level and at all lower levels.
540
Batch Management
Batch Classification
All classes used for batch classification are assigned to class 022/023. They are required for batch determination. The material and its batches are related by classes. This is to ensure that the same characteristic is used for the material and batch. Characteristics are identified uniquely by the value or range of values. Batch Specifications An Example Example of Paint production illustrates how batch specifications are used. Characteristics of Material A Target Value Viscosity 41 - 50 Ph value 3.1 6.0 Hydrolizable chloric content 23 25 Epoxy count 23 - 25 Volatile proportion 0.0 0.5
541
Batch Management
You define these specifications as characteristics and assign them to a class. You then assign this class to a material master record (in classification view). When you maintain the material master record, you can thus specify the target values or range of values of the specifications. In the classification system, you define class for this material called Paint. Under the characteristics, you set up: Viscosity 41 - 50 Ph value 3.1 6.0 and so on. When the batch is produced, the specifications are checked in the laboratory and fixed values for each batch are determined. If these values lie within the specified range, the batch is acceptable. The validity of the specifications you enter is immediately checked. This is possible in the system as the material and the batches belong to the same class. In our example, the actual values attained for the specifications for batch A124495 are as follows:
542
Batch Management
Characteristics of Batch A124495 Viscosity Ph value Hydrolizable chloric content Epoxy count Volatile proportion Actual Value: 42 3.5 24 23.5 0.10
Since all the values are within the range specified in the characteristic, the batch A124495 is accepted. If you have entered an interval value for a numeric characteristic in the material master record, you will be able to assign either the whole interval (for example, viscosity between 41 - 50 in the above example) a restricted interval (viscosity between 42 44 in the above example) 543 a certain value within this interval to the material (viscosity of 43.5
Batch Management
Batch Management in Inventory Management

Batch determination Batch Where-Used List Active Ingredient Management Entering a batch
544
Batch Management
Two types of master data exist for every batch in the warehouse,
namely: General data for the batch at plant level, material level, or client level (batch master record) Stock data for the batch at storage location level
545
Batch Management
Stock types
The following stock types are managed at batch level: Unrestricted-use stock Quality inspection stock Blocked stock Restricted-use stock (only with batch status management) Stock in transfer (for stock transfers between storage locations) Blocked stock returns All other stock types for the material are managed on a cumulative basis at storage-location or plant level.
546
Batch Status Management
Batch status management can be activated in the Customizing system. The system differentiates between two different statuses: A batch can either have the status unrestricted use or the status restricted use. The status is stored centrally as part of the batch and is used as a batch characteristic in classification, which, in turn, is responsible for batch selection in batch determination.
547
Shelf life expiration date in Batch Management
If the shelf life check expiration date check is active, you must enter the
shelf life expiration date or the production date of the material at the time of a goods receipt. At the time of goods receipt, the system checks whether the remaining shelf life is sufficient. If this is not the case, a warning or error message is issued, depending on the system settings. When the goods receipt is posted, the shelf life expiration date is recorded in the material document. Materials handled in batches: For materials handled in batches, the date is also stored in the batch master record. For a further goods receipt for a batch, the shelf life expiration date entered or determined with the movement is compared with the one from the batch master record. If the dates differ, a warning or error message is issued, depending on the system settings. If the goods receipt is posted despite any warning, the old shelf life 548
Curriculum

549
Physical Inventory
Physical Inventory This component is used to carry out a physical inventory of your companys warehouse stocks for balance sheet purposes. Different methods / procedures can be used for doing this. Duration (hours) 8 Objective To get familiar with Physical Inventory component Pre-requisites N. A Introduction Course Content
Demo1_ Create Physical Inventory Document 550
Introduction
Physical Inventory In SAP R/3, physical inventory can be carried out both for a
companys own stock and for special stock. Inventory for a companys stock and for special stocks (such as consignment stock at customer, external consignment stock from vendor, or returnable packaging) must be taken separately i.e., in different physical inventory documents. The stock in a warehouse can be divided into stock types. In the standard system, a physical inventory can be carried out for the following stock types: Unrestricted-use stock in the warehouse Quality inspection stock Blocked stock
551
Introduction
Physical Inventory Process Diagram

Physical Inventory Preparation
Create physical inventory doc.1 Print physical inventory doc. 2
Stock Count Overview
Batch input
Arrange for recount 6a Enter physical inventory count 5 Print list of differences 6
4
Carry out physical inventory count 3

Enter Result in Printout
Physical Inventory Count
Post differences
552 Physical Inventory Analysis
Demo1_Create Physical Inventory Document
Objecti Create a physical inventory document (MI01) ve
553
Print Physical Inventory Document the Print Physical inventory document by using MI21 & Distribute it to
the persons responsible for doing counting
Phy.Inv.Doc
554
Physical Inventory Count
Enter the count by using MI04 During the inventory count, all the materials being inventoried are
counted and entered physically. The stocks are counted for individually for the materials in a physical inventory document. The count results are written on the printout of the physical inventory document. The printout is then directed back to the person responsible, so that he or she can enter the count into the system and analyze it.
555
Demo2_ Enter Inventory Count
Objecti Enter Inventory Count (MI04) ve
556
Recounting
To initiate a recount, proceed as follows: Go to MI11, On the initial screen, enter the physical inventory document for which you want to initiate a recount. By specifying a threshold value, you can limit the number of items in the recount. Select the items for which you want a recount A new physical inventory document is created that contains the selected items. The system confirms the posting and displays the number of the physical inventory document
557
Posting Inventory Differences
The various options for posting inventory differences are:
Posting differences after the count has been posted

A physical inventory document has already been created, and the count has already been posted. You only have to post the inventory differences (MI07). Posting the count and inventory differences simultaneously after the physical inventory document has been created A physical inventory document has been created, but the count has not yet been posted. The count results are available. You enter the count and post the differences in one step (MI08). Entering the count without a document reference You have a count result without reference; that is, no physical inventory document has yet been created for this physical inventory transaction. You create a physical inventory document, enter the 558 count, and post the differences in one step (MI10).
Demo3_ Posting Difference
Objecti To Post Differences ve
559
Account Activity During Posting of Inventory Differences
The account activity during posting of the inventory differences

depends on which stock was inventoried:
Company's own stock

When you post inventory differences, the material master record is changed; total stock is automatically adjusted to the counted quantity. From the accounting point of view, this corresponds to a goods receipt or goods issue, meaning that when the inventory difference is posted, the stock account is debited or credited. Inventory Differences in Consignment Stock When you post inventory differences, the material master record is changed, the vendor consignment stock is automatically adjusted to the counted quantity. Since this stock type is not 560 managed by value, from the accounting point of view, there is no
Counted Stock Smaller than Book Inventory Balance

If the counted consignment stock is smaller than the book inventory balance, the system assumes that the difference was withdrawn from consignment stock and did not "disappear" until afterwards. The inventory difference is posted as a withdrawal and the withdrawal has to be paid to the vendor. When you post inventory differences, thats why the same account movements take place as those that take place when you carry out a transfer posting from consignment stock to your companys own stock, with the exception that the amount that was posted to the stock account is posted to the "Expenditure from inventory differences" account.
561

Counted Stock Greater than Book Inventory Balance If the counted consignment stock is greater than the book inventory balance, the system assumes that larger withdrawals were posted from consignment stores than actually occurred. Thus, the inventory difference is posted as a withdrawal reversal. Since withdrawals are posted to the "Payables from consignment stores" account, postings must be made to this account when the inventory difference is posted
Movement Type Description Account Postings Stock Material Stock Take Clearing Debit Credit Debit Credit X X X X -
701/703/707 GR Physical Inventory: UR, QI, Blk (Gain) 702/704/708 GI Physical Inventory: UR, QI, Blk (Loss)
562
Reports on Physical Inventory
The following functions in the physical inventory menu provide

information on the physical inventory: Displaying the physical inventory documents for a material Displaying Displaying Displaying Displaying Displaying the physical inventory data for a material MI23 the physical inventory overview MIDO the physical inventory list MI24 the list of physical inventory differences MI20 changes to physical inventory documents MI12
MI21
563
Physical Inventory Procedures
Periodic
Continuous
Phy. Inventory Procedures
Sampling
Cycle Counting
564
Periodic Inventory All stocks of the company are physically counted on the
balance sheet key date. Every material must be counted. The entire warehouse must be blocked for material Movements.
565
Continuous Inventory
In the continuous inventory procedure, stocks are counted continuously during the entire fiscal year. In this case, it is important to ensure that every material is counted once at least once during the fiscal year.
566
Cycle Counting Procedure

Create physical inventory documents - MICN Enter the data required Carry out the evaluation Generate session to create batch input session process the session Carry out the phy inv for the docs created
567
Inventory Sampling
Inventory Sampling reduces the time and cost of a physical inventory considerably by counting only the stock of individual materials and carrying out an extrapolation to arrive at an estimated count result for all units of stock managed. There are two methods of carrying out an inventory sampling: Periodic inventory sampling In this procedure, the count is carried out on a key date. During the physical inventory, movements in the warehouse as well as changes to the book inventory balances are not allowed. Continuous inventory sampling In this procedure, stock is counted over an extended period of time. In this case, inventory sampling data is updated from time to time to correspond to the latest book inventory balances. Changes 568 to the book inventory balances are thus reflected in the calculations
Inventory Sampling -Preparation Phase 1. Creating an inventory sampling In this step you have to define several basic parameters, such as: Which currency is to be used for the inventory sampling The area in which the inventory sampling is to be carried out The deviations up to which an inventory sampling is still considered successful 2. Allocating the stock management levels In step 2, we allocate certain quantities of stock management units / levels, to the inventory sampling that is to be included.
569
Inventory Sampling -Preparation Phase 3.Forming the stock population The stock population is the total of all stock management units of an inventory sampling. While forming the stock population Breakdown of the stock population and Classification are carried out automatically. 4. Generating a stratification To reduce the number of stock management units to be counted to a minimum, the sampling area is divided into individual strata. The stratification is generated using classification. The value dispersion in a stratum is considerably smaller than in the entire sampling area. With a small value dispersion, only relatively few 570 elements must be selected to obtain a representative result. This
Inventory Sampling Active Phase 1.Generating the random selection In the process of random selection, the system determines the stock management units to be counted for each stratum. 2.Creating physical inventory documents Phy inventory documents must be created for the stock management units to be counted. These documents are required for all stock management units drawn during random selection and that were allocated to the complete-count area when the stock population was formed.
3.Update
571
Inventory Sampling Active Phase 4. Extrapolation During the extrapolation process, the system estimates the physical inventory value of the sampling area on the basis of the latest counting results. An average physical inventory value per item is calculated in every stratum and multiplied by the number of items in each stratum. The total of the stratum values determined in this way gives the estimate for the sampling area
572
Summary of Physical Inventory

SAP Functionality
Stock materials Special stock
SAP
Stock Count
Stage 1 Create and Print Physical Inventory Document Stage 2 Conduct Physical Count Input Count Results on document printout Stage 3 Enter Count Results in SAP Display Difference List Conduct and Enter Recount Post Inventory Differences
Accounting Document
Co. Co. xyz
Physical Inventory 1 Document

2
MI07 701/702
MI07 703/704
Gain or Loss on UR Stock Gain or Loss on QI Stock

573
Material Document
Co. Co.
xyz
Curriculum

574
Consumption-Based planning
ConsumptionBased planning Duration (Hours) Objective Pre-requisites Course content
Consumption based planning is based on past consumption ,it calculates the future requirements. 1 To get familiar with RFQ/Quotation
Material Master,
Introduction Concept MRP procedures MRP and CBP CBP- Reorder point planning Lot sizing
575
Introduction
What is Consumption-Based planning? Distinguish Consumption-Based planning from Material requirements

planning?
What are the various procedures in Consumption-Based planning?
576
Concept
In a manufacturing company, particular materials, such as office
Material or Low-value materials that are needed in production (Screws, washers, Markersetc), are planned in consumption basis. This is called as consumption based planning.
Consumption-Based planning is mostly used in order to plan B and C

materials and Operating supplies.
Material requirements planning is based on current and future

requirements.
MRP is epically useful for planning Finished products and important

assembly groups and Components (A materials).
In MRP requirement elements are the sales orders, planned
577
MRP procedures
MRP procedures:
MRP procedures Consumptionbased planning MRP
Reorder point planning
Forecast-based planning
Time-phased planning
Manual Reorder point
Automatic reorder point
578
MRP and CBP
Materials planning can be executed at plant level or below

the plant level of individual MRP areas.
In order to carry out material requirements planning for a
plant. You have to activate MRP at respective plant You have to maintain MRP parameters at this plant. You have to maintain the MRP data of the Materials in Material Master record
579
MRP and CBP
MRP type is the key that control the MRP procedure to be
used for planning the material. Further data in material master record controls the lot-size calculation or scheduling calculation.
MRP type controls which planning parameters must or can

be entered when maintaining the material master record.
MRP profile is the key in which you can store MRP
parameters that do not dependent on material master record.
580
CBP- Reorder point planning

Re-Order Point Planning
Lot size Stock
Reorder Point
Safety Stock
Release date
Available date Replenishme nt lead time
Time
581
CBP- Reorder point planning
The reordered point planning is the comparison of the available
warehouse stock and the fixed receipts with reorder point. If the available warehouse stock is less than the reorder point, then the net requirements calculation is triggered.
The reorder point is composed of the expected average material

requirements during the replenishment lead time and the safety stock.
The safety stock must cover both the unplanned material excess
consumption during the replenishment lead time, as well as additional requirements caused by the delayed deliveries.
582
Lot sizing
Lot sizing procedure: The system calculates the receipt of quantity

in lot sizes. There are 3 lot sizing procedures are there, 1. static procedure 2.perodic procedure 3. Optimum procedure.
You specify how the system is to determine the lot sizes, by
selecting one of the lot sizing procedures in material master record.
583
Planning run
Planning run: In planning run system carries the following process,

1. The system checks the planning file entries 2. The system carries out a net requirements calculation for every material 3. the system carries out the lot-sizing calculation 4. The system carries out scheduling to calculate the start and finish dates of the procurement proposals 5. The system determines the type of procurement proposals. Depending on the settings, the system creates either planned orders, purchase requisitions or schedule lines for a material Planning run types:
584
Planning run
To execute the planning run The following functions are provided

Total planning Single-item, single-level planning Multi-level single-item planning Interactive planning Multi-level, make-to-order production Individual project planning
585
Planning result and evaluation
Planning result and Evaluation:
The following evaluations are available for evaluating the planning

results in consumption-based planning: MRP list Current stock/requirements list
586
Demo1_ CBP and MRP data in Material master record
Object To maintain the data in MRP1 view of material ive mater record
587
588
589
Demo2_MRP
Object To create the planned independent ive requirements
590
Demo2_MRP
Object To maintain the planned independent ive requirements
591
Demo2_MRP
Object To carry out the planning run ive
592
Curriculum

593
Reporting in MM
In Purchasing, a variety of documents are maintained such as
Purchase Requisition, Purchase Order, Goods Receipt and Invoice Receipts The R/3 system updates these documents and stores them in database tables. Standard Analysis can be used to analyze the information contained in these documents. For example we would want to know List of Purchase Orders for a Vendor The number of Purchase orders for which you have already received goods. The average value of each PO for a purchasing group Receipts / issues for a given material for a given period Stock at a given plant and storage location 594 Inventory turnover.
Reporting in MM
You can carry out analysis for Master data as well as documents The reports which are outputted can be saved in an MS- Excel
sheet or as a pivot chart The analysis in the R/3 system provides the users with a quick and convenient overview.
Two important fields in a report are

Selection Parameters : It determines which Purchasing documents the report evaluates. Scope of list : This determines which data is displayed for the document.
595
Reporting in MM
Objec To generate a list of Purchase Orders for a tive Vendor
596
Reporting in MM
Objecti To generate a list of Purchase Orders for a ve Vendor
597
Logistics Information System
SAP Logistics offers a range of application related information

systems All have standard interface and similar basic functionality All Logistics Information systems have the same type of data retention. Different information systems available in SAP are SIS : Sales Information System PURCHIS : Purchase Information System INVCO : Inventory Controlling WMIS : Warehouse Management Information System PPIS : Shop floor Information system
Information system in LIS are continuously supplied with data from

transaction systems (Sales and distribution, Purchasing, Production
598
Logistics Data warehouse
The physical tables in the SAP information warehouse are
information structures or info structures. The objects to be analyzed in the real business world go into info structures as evaluation groups in the form of characteristics. Organizational elements, such as, Purchasing group, Material group, Plant are used as characteristics in info structures.
599
LIS reports
Objec To generate standard report from LIS tive
600
LIS reports
Objec To observe the drilldown function in LIS reports tive
601
LIS reports
Objec To observe the drilldown function in LIS reports tive
602
Curriculum

603
Agenda
Name of Standard Tables in MM the section Duration 1 (hours) Objective To understand the different tables related to Materials Management. Pre Knowledge on SAP MM requisites
Course Content
Material Master tables Purchasing tables
604
Material Master Tables
605
Purchasing Tables
606
Purchase Order Linking of Tables
607
Goods Receipt Linking of Tables
608
List of Tables
EINA EINE MAKT
Purchasing Info Record- General Data Purchasing Info Record- Purchasing Organization Data Material Descriptions
MARA
MARC MARD MAST MBEW MKPF MSEG MVER MVKE RKPF
General Material Data

Plant Data for Material Storage Location Data for Material Material to BOM Link Material Valuation Header- Material Document Document Segment- Material Material Consumption Sales Data for materials Document Header- Reservation
609
List of Tables
A501 EBAN EBKN EKAB EKBE EKET EKKN EKKO
Plant/Material Purchase Requisition Purchase Requisition Account Assignment Release Documentation History per Purchasing Document Scheduling Agreement Schedule Lines Account Assignment in Purchasing Document Purchasing Document Header
EKPO
IKPF ISEG LFA1 LFB1
Purchasing Document Item

Header- Physical Inventory Document Physical Inventory Document Items Vendor Master (General section) Vendor Master (Company Code)
610

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SAP Materials Management Lateral Cross Training Material

26th June, 2007

Knowledge on ERP Solution

SAP Overview Industry Solutions from SAP Main Modules of SAP

Various SAP Business suite : mySAP Enterprise resource planning

mySAP Supply chain management

SAP overview Industry solutions from SAP

Aerospace & Defense

Logistics Service Providers

SAP overview Industry solutions from SAP (..Contd)

Oil & Gas

Small and medium business solutions

New dimension products

SAP R/3 main modules are

1. Introduction to Procurement 2. Organization Structure 3. Master Data

Name of the section

The process of obtaining services, supplies, and equipment from a

The procurement department or the purchase department within an

Organizational levels in a procurement cycle

A client can be termed as a corporate group

Company Code Plant

A plant is the manufacturing facility or branch within the company

Storage Location Pur Org

Internal Procurement External Procurement

Selection of vendors from the vendor database

Vendor Selection and Comparison of Quotations

External Procurement 1. Determination of Requirements

Procurement for Stock

Procurement for Direct Consumption

There are 3 basic forms of external procurement supported by MM Purchasing component.

Forms of Procurement One-Time Purchase Order

Contract and Release Orders

1. Introduction to Procurement 2. Organization Structure 3. Master Data

Is the Highest Legal Entity An Independent Unit in R/3 System

Manufacturing, sales, storage Unit, Admin Building)

The storage location is an organizational unit that allows the

Responsible Organizational Unit for Procuring material /

The groups which are responsible for day to day buying

CLIENT COMPANY PLANT STORAGE LOCATION

REF PURCHASE ORGANIZATION

Configuration Enterprise Structure

Defining Organizational Elements

Assigning Enterprise Structure

Activate Company code for Materials Mgmt

1. Introduction to Procurement 2. Organization Structure 3. Master Data

Duration (Hours) Objective Pre-requisites Course content

Note Fields in red boxes are mandatory fields.

Material master contains the information on all the materials that a

Materials planning Material Master Record

Stocks in Plant/ stor Loc

Integration of all material data in a single database , prevents the

Selective views - Basic Data - Purchasing - Accounting

Organizational levels - Plant -Storage location -..

When creating or editing a material master data, you go through a number of

Procurement type User departments Field selection Account determination

Purchasing data in material master record

Material Valuation procedures

Price control ( In material master )

V Moving average price

Valuation of goods receipts depends on the price control procedure

In the standard price procedure (price control S), the system

In the moving average price procedure (price control V), the