MELJUN CORTES Materials Management Master Data and Rules

Unit 7

Materials Management (MM)

- Master Data and Rules -

January 2008© SAP AG - University Alliances and The

Rushmore Group, LLC 2008. All rights reserved.

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Business Process Integration

Rules

MM

Master Data

MM



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Master Data

• Master data is relatively fixed– Material master data– Vendor master data– Purchasing information record

– General Ledger master data • Before making the master data configurations,

you must have completely defined the organizational structures



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R/3

FIFinancialAccounting

COControlling

PSProjectSystemWF

WorkflowISIndustrySolutions

MMMaterials Mgmt.

HRHumanResources

SDSales and Distribution

PPProductionPlanning

QMQualityMgmt.PM

Plant Maintenance

SMServiceMgmt.

Client / ServerIntegrated BusinessSolution

ECEnterpriseControlling

AMFixed AssetsMgmt.

R/3

FIFinancialAccounting

COControlling

PSProjectSystemWF

WorkflowISIndustrySolutions

MMMaterialsMgmt.

HRHumanResources

SDSales and Distribution

PPProductionPlanning

QMQualityMgmt.PM

Plant Maintenance

SMServiceMgmt.

Client / ServerIntegrated BusinessSolution

ECEnterpriseControlling

AMFixed AssetsMgmt.

Materials Management (MM)



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Unit 7, Part 1 – Overview (Master Data)

• Unit Concept• Procure-to-Pay Process• Vendor Master Data• Purchasing Information Record



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Unit Concept

• The purchasing process involves the acquisition of goods and services to support the creation of goods and services in the organization

• Master data and rules required for the purchasing process is presented



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Procurement Process (Procure-to-Pay)

Purchase Requisition

Paymentto Vendor

Notify Vendor

VendorShipment

InvoiceReceipt Goods

Receipt

Purchase Order

3-WayMatch



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Master Data – General

• Business rules and supportive information are stored in master data records

• Each master data record is unique in name or number

• Internal or external number ranges are possible• Usually created or converted (legacy system) in

the beginning• Maintained by numerous organizations



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Master Data – General (continued)

• Vendor master records are maintained by both accounts payable (A/P) and purchasing

• Material master records are maintained by purchasing, sales, production, accounting, etc.

• Purchasing information records are maintained primarily by purchasing



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Vendor MasterOrganization of the Data

General Data:

AddressPurchasing

Data

Vendor 10001

General Data

Company Code DataFinancial Accounting (FI)

Purchasing Organization Data (MM)



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Vendor Master Data

• A master record must be created for every vendor

• General data, Company Code data (Financial Accounting - FI), and Purchasing Org data (Material Management - MM)

Purch. org data Purchasing data Partner functions

Company code data Account management Payment

transactions

General data Address Control data Payment transactions



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Vendor Master

• Includes all data necessary for processing business transactions and corresponding with vendors

• Information is shared between the accounting and purchasing departments



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Vendor Master – Typical Screens

• Address• Control• Payment Transactions• Accounting Information• Correspondence• Purchasing Data• Partner Functions



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General Data – Address

Address Vendor Name Search Term Street address City, Region Postal code Country

CommunicationLanguageTelephone, Fax, E-Mail

Vendor Master General Data – Address



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Vendor Master General Data – Control Data

• Account Control– Customer– Authorization– Trading partner– Group key

• Tax Information– Tax codes– Fiscal address– Country code– City code

• Reference Data / Area– International locator number– Industry– Transport zone



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Vendor Master General Data – Payment Transactions

• Bank Details– Bank Key– Bank Account– Account Holder– Partner Bank Type

• Payment Transactions– Alternative Payee– Instruction Key



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Vendor Master – Company Code – Accounting Information

• Accounting Information– Reconciliation Account– Sort Key

• Interest Calculation– Interest Calculation Indication – Interest Calculation Frequency

• Withholding Tax– Withholding Tax Code– Exemption Number



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Vendor Master – Company Code – Payment Transactions

• Payment Data– Payment Terms– Tolerance Group– Check Double Invoice– Check Cashing Time

• Automatic Payment Transactions– Payment Methods– Alternate Payee– Payment Block

• Invoice Verification– Tolerance Group



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Vendor Master – Purch. Org. Data –Purchasing Data

• Conditions– Order Currency– Terms of Payment– Incoterms– Minimum Order

Value• Sales Data– Salesperson

• Control Data

– Acknowledgement Required

– Returns to Vendor– Automatic Purchase

Order • Default Data Material

– Purchasing Group– Planned Delivery Time



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Vendor Master – Purch. Org. Data – Partner Functions

• Partner Functions– Partner Function– Partner Name



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Vendor Master – Purch. Org. Data – Account Group

• Vendor masters are assigned to a vendor account group

• Through field status maintenance, vendor account groups can be setup for one-time vendors, regional vendors, and internal vendors

• The vendor account group controls both type and number range assignment for vendors



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Purchasing Info Record

• The purchasing info record provides continuously updated information about the relationship of a specific material with a specific vendor

• Order unit, price, price changes, tolerances, reminder infos, historic data, statistics, texts

• Choice of automatic or manual updating



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Source List

• The source list stores information about where to acquire a given material for a given period of time

• It specifies whether this source should be used by Materials Requirement Planning (MRP)



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Unit 7, Group 1 – Exercises

59. Vendor Account Groups60. Create Vendor Master Accounting Record61. Create Vendor Master Purchasing Record62. Create Vendor Master Record Centrally63. Create Vendor Master Record Centrally64. Create Vendor Master Record Centrally



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Unit 7, Part 2 – Overview (Rules)

• Fiscal Period• Plant Parameters• MRP



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Rules

• Defines the parameters for Master Data and Transactions

• Determines functionality for Master Data and Transactions

• Relatively fixed• Changes as policy changes



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Fiscal Period

• In order to execute any material postings, the current fiscal period has to be activated

• By initializing the company code for material management, the first major integration between Financial Accounting (FI) and Logistics is completed



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Plant Parameters

• Material Requirements Planning (MRP) controllers– Individuals responsible for running and

maintaining Material Requirements Planning data and reports

• Negative stock allowance– If a material is allowed to go negative for inventory

stock



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Plant Parameters – (continued)

• Purchasing– Special purchasing rules– External purchasing only settings

• Planned orders– Rescheduling– Conversion to purchase requisitions



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Plant Parameters – (continued)

• Document number ranges– Planned orders– Purchase requisitions– Material Requirements Planning (MRP) lists– Reservations



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Material Requirements Planning

• Detailed planning level• Primary Functions – Monitor inventory stocks– Determine material needs• Quantity• Timing

– Generate purchase or production orders



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Materials Requirements Planning(continued)

• Integrates Production Planning (PP) module with the Materials Management (MM) module

• Prerequisites for Materials Requirement Planning (MRP)– Activate Material Requirements Planning (MRP)

for a plant– Material Master created• Material Requirements Planning view • Material Requirements Planning type



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Material Requirements PlanningBasic Process

• Exploding the Bill of Material (if using production)

• Netting Out Inventory• Lot Sizing• Time-phasing requirements



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Material Requirements PlanningNet Requirements

• Material Requirements Planning (MRP) calculates the quantity of material needed, if any, based on– Sales Orders– Material Reservations– Repair Parts– Inventory– Purchase Orders– Etc…



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• If adequate inventory is not available to meet Material Requirements Planning (MRP) needs then the system generates– Planned Production Orders – Planned Purchase Orders

Material Requirements PlanningNet Requirements – (continued)



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Material Requirements PlanningLot Sizing

• Static– Based on fixed values in the Material Master

• Periodic– Groups net requirements together from multiple

periods• Optimum– Calculates the optimum lot size for a several

periods of net requirements



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65. Initialize Fiscal Period for Company Code 66. Maintain Plant Parameters for Material

Management67. Activate Materials Requirements Planning



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Unit 7, Part 3Overview (Material Master)

• Industry Sector• Material Type• Maintenance Features• Organizational Levels• Primary Views



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Material Master – Industry Sector

• Records are grouped according to industry sector and material type

• Determines the industry specific data that will appear on the master record



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Material Master – Material Type

• Material types group materials with the same attributes

• Material type information determines:– What views are maintained– Whether internal or external procurement is

allowed– If changes in material quantity are updated– Which general ledger accounts are updated



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Material Master – Material Types

• Standard material types are used in all industries. – ROH: Raw Materials • Purchased externally only • No sales view

– HAWA: Trading Goods • Always purchased externally• Sold without any change to the material• No manufacturing views exist



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Material Master – Material Types (continued)

– FERT: Finished Products• Are produced internally • Normally no purchasing views exist



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Material MasterAdditional Material Types

• HIBE: Operating Supplies• VERP: Customer returnable packaging• LEER:Empty containers• KMAT: Configurable material• ERSA: Spare parts • DIEN: Services



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Material MasterAdditional Material Types (continued)

• NLAG: Non-stock, non-valuated material

• UNBW: Non-valuated, stocked material

• FHMI: Production resources/tools• WETT: Competitive products• PROD: Product group• IBAU: Maintenance assembly

(Plant Maintenance)



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Material Master Maintenance

• Defaults - speeds entry of data by using the most frequently used field values (plant, purchasing organization, etc.)

• Reference Material - speeds entry of data by copying data from existing material master

• Profiles - speeds entry of data by copying standard data created in a profile into a selected view Materials Requirements Planning (MRP)

• Collective entry of storage location data - speeds creation of multiple storage locations



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Material Master Data

• Material master data can be related to all organizational levels

• General information of a material (description, number, base unit of measure) – Has to be related to the highest level of

organization - the client



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Material Master – Levels

• Client– Description– Units of measure– Material number– Engineering data

• Plant– Planning data– Manufacturing data– Purchasing data



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Material Master – Levels (continued)

• Storage Location– Stock quantities



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Material Master – Views

• Basic data 1, 2• Classification • Sales: sales organization data 1, 2• Sales: general/plant data• Sales text• Purchasing• Purchase order text• Forecasting



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Material Master – Views (continued)

• MRP 1, 2, 3, 4 • Work scheduling • Storage• Warehouse management• Quality management• Accounting 1, 2• Costing 1, 2



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Material Master – Material Management

• Basic Data• Purchasing• MRP 1,2,3• General Plant

Data/Storage• Accounting 1

Purchasing

View MRP 1View

Barrel Pen



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Material Master – Basic Data

• General data– Basic Unit of Measure• Unit of measure in which stocks of the material are

managed– Material Group• Key that you use to group together several materials or

services with the same attributes (e.g. productions, sales, touring-bike, off-road)

– Division• Used to determine the sales area and the business area

for a material, product, or service



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Material Master – Basic Data (continued)

• Dimensions/EANs– Gross weight• Used to check storage capacity in warehouse

– Net weight• Weight excluding packaging and extras – this is needed

for sales and distribution– Weight Unit• Unit of Measure for weight

– Volume• The space that the material occupies per unit of

volume



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Material Master – Purchasing View

• General Data– Order Unit• The unit of measure in which a company purchases the

product– Purchasing Group• Key for a buyer or a group of buyers, who is/are

responsible for certain purchasing activities.• Purchasing Values– Purchasing Value Key• Define the reminder days and tolerance limits for

purchasing



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Material Master – Plant Data/Storage 1• General Data– Container Requirements

• Define the regulations that govern which type of container the material must be stored and shipped in

– Storage Conditions• Defines the conditions on how a material must be stored or

warehoused • Shelf Life Data– Minimum remaining shelf life

• Minimum time the material must keep upon goods receipt for the goods receipt to be accepted by the system

– Total Shelf Life• Period of time the material will keep in total, from the date

of production or receipt to the shelf life expiration date



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Material Master – MRP 1

• General Data– Purchasing Group• The buyer(s) who are responsible for certain purchasing

activities• MRP Procedures– MRP Type• Determines whether and how the material is planned

– Reorder Point• If stock falls below this point, the system is flagged to

create a planned order– MRP Controller• The person(s) responsible for the material planning



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Material Master – MRP 1 (continued)

• Lot Size Data– Lot Size• The lot sizing procedure to calculate the quantity to be

produced or procured– Minimum Lot Size• The smallest order quantity

– Fixed Lot Size• The quantity to be ordered



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• Scheduling– Planned Delivery Time• Number of calendar days needed to obtain the material

– Scheduling Margin Key• Used to determine the floats required for scheduling

• Net Requirement Calculation– Safety Stock• Specifies the quantity whose purpose is to satisfy

unexpectedly high demand in the coverage period



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• Availability Check– Specifies whether and how the system checks

availability and generates requirements for materials planning



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Material Master – Accounting 1

• Current Valuation– Valuation Class

– Allows the stock values of materials of the same material type to be posted to different G/L accounts.

– Allows the stock values of materials of different material types to be posted to the same G/L account.

– Determines together with other factors the G/L accounts updated for a valuation-relevant transaction (Material Movements)

– Price Unit– Number of units to which the price refers



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Material Master – Accounting 1 (continued)

• Current Valuation– Price Control Indicator

– The price control used to valuate the stock of a material (e.g, Standard or Moving Average Price)

– Standard Price– The valuation of material stocks at standard prices

means that all goods movements are valuated at the same price over an extended period

– Moving Average Price– The system calculates the moving average price

automatically by dividing the material value in the stock account by the total of all storage location stocks in the plant concerned



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68. Define Attribute for Material Types (Set Updating/Deselect Classification)

69. Create Material Master for Trading Goods70. (Optional Exercise) Create Material Master for

Operating Supplies

Documents

MELJUN CORTES Materials Management Master Data and Rules