Business Management / Enterprise Resource Planning A h m Although tens of thousands of global users have implemented Systems, Applications, The SAP e and Products (SAP) for enterprise data processing for decades, there has been a need for a d dependable reference on the subject, particularly for SAP materials management (SAP MM). T Filling this need, The SAP Materials Management Handbook provides a complete Materials understanding of how to best configure and implement the SAP MM module across various h types of projects. It uses system screenshots of real-time SAP environments to illustrate the e complete flow of business transactions involved with SAP MM. Supplying detailed explanations S of the steps involved, it presents case studies from actual projects that demonstrate how to A convert theory into powerful SAP MM solutions. Management P • Includes tips on the customization required for procurement of materials M and inventory management • Covers the range of business scenarios related to SAP MM, including the a t Handbook subcontracting cycle and consignment cycle e r • Provides step-by-step guidance to help you implement your own SAP MM module i a • Illustrates the procure to pay lifecycle l s • Depicts critical business flows with screenshots of real-time SAP environments M This much-needed reference explains how to use the SAP MM module to take care of the a range of business functions related to purchasing, including purchase orders, purchase requi- n sitions, outline contracts, and request for quotation. It also examines all SAP MM inventory a Ashfaque Ahmed management functions such as physical inventory, stock overview, stock valuation, move- g ment types, and reservations—explaining how SAP MM can be used to define and maintain e m materials in your systems. e n t H a n d b o K18886 o an informa business ISBN: 978-1-4665-8162-3 www.crcpress.com k 90000 6000 Broken Sound Parkway, NW Suite 300, Boca Raton, FL 33487 711 Third Avenue 9 781466 581623 New York, NY 10017 2 Park Square, Milton Park www.auerbach-publications.com Abingdon, Oxon OX14 4RN, UK K18886 cvr mech.indd 1 2/7/14 12:40 PM The SAP Materials Management Handbook The SAP Materials Management Handbook Ashfaque Ahmed The SAP Materials Management Handbook Ashfaque Ahmed CRC Press Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2014 by Taylor & Francis Group, LLC CRC Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Version Date: 20140203 International Standard Book Number-13: 978-1-4665-8163-0 (eBook - PDF) This book contains information obtained from authentic and highly regarded sources. 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Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the CRC Press Web site at http://www.crcpress.com Contents Preface ...............................................................................................................................xxv Author .............................................................................................................................xxvii 1 Introduction to SAP Materials Management and Navigation .....................................1 Introduction ......................................................................................................................1 What Is SAP? .....................................................................................................................1 Importance of Enterprise Resource Planning .....................................................................2 What Is SAP MM? ............................................................................................................2 SAP Is Not Easy ................................................................................................................3 Complexity Issues for End Users...............................................................................3 Complexity Issues for SAP Consultants ....................................................................3 Typical Nature of SAP Transactions .........................................................................3 Typical SAP User Screens .........................................................................................4 Difficult Language ....................................................................................................5 Navigation .........................................................................................................................5 Log On .....................................................................................................................5 User Screen Elements ................................................................................................6 Menu ...............................................................................................................6 Standard Tool Bar ...........................................................................................7 Title Bar ..........................................................................................................8 Application Tool Bar .......................................................................................8 Screen Body .....................................................................................................8 Status Bar ........................................................................................................8 Standard Tool Buttons ..............................................................................................8 Personalization ...................................................................................................................9 Transaction Codes .............................................................................................................9 Help Functions .................................................................................................................10 2 Business Mapping in SAP Materials Management and Job Advice............................11 Introduction .....................................................................................................................11 Business Function Mapping in SAP MM ........................................................................12 Purchase Requisition ...............................................................................................13 Purchase Order ........................................................................................................13 Request for Quotation .............................................................................................13 v vi  ◾  Contents Contract ..................................................................................................................13 Scheduling Agreement .............................................................................................13 Invoice .....................................................................................................................14 Material Requirement Planning ...............................................................................14 Reservation ..............................................................................................................14 Material Document .................................................................................................14 Financial Document ................................................................................................14 Core and Central Functions .............................................................................................15 Minimal Customization Required in SAP MM ................................................................15 Real World and SAP .........................................................................................................15 Job Advice .........................................................................................................................15 How to Learn SAP............................................................................................................16 Project Management and SAP Responsibilities .................................................................17 3 SAP MM Masters and Organizational Structure .......................................................19 Introduction .....................................................................................................................19 Material Master ...............................................................................................................20 Material Master Setup Information ........................................................................22 Material Master Views ............................................................................................22 Basic Data View 1 .........................................................................................22 Basic Data View 2 .........................................................................................24 Sales Organization Data View 1 ....................................................................26 Sales Organization Data View 2 ....................................................................27 Sales: General Plant Data View .....................................................................27 Purchasing View ............................................................................................28 MRP Views ...................................................................................................29 General Plant Data Views ...............................................................................31 Accounting Views ..........................................................................................32 Costing Views ................................................................................................33 Material Types .................................................................................................................37 Important Material Types .......................................................................................37 Additional Material Types ......................................................................................38 Material Group ................................................................................................................39 Plant ................................................................................................................................40 Storage Location ..............................................................................................................42 Purchasing Organization .................................................................................................43 Purchase Group ...............................................................................................................48 Purchasing Value Key ......................................................................................................48 Vendor Master .................................................................................................................49 Source List ........................................................................................................................52 Info Records ....................................................................................................................54 Info Record at Plant or Purchasing Organization Level ..........................................56 Info Record Structure ..............................................................................................57 Procurement Types in Info Record ..........................................................................57 Info Record Net Price and PO Net Price .................................................................57 Creating Info Records ............................................................................................58 Net Price Simulation ..............................................................................................58 Contents  ◾  vii Conditions .......................................................................................................................58 Condition Groups....................................................................................................59 Variant Conditions ..................................................................................................59 Pricing (Condition Technique) .........................................................................................59 Quota Arrangement .........................................................................................................60 Quota Arrangement Calculation ............................................................................60 4 SAP MM Purchasing Management ............................................................................61 Introduction .....................................................................................................................61 Integration Points ............................................................................................................62 Make to Stock versus Make to Order ...............................................................................63 Complete Purchasing Cycle .............................................................................................64 Purchase for Stock versus Purchase for Consumption .......................................................65 Automatic Account Determination ..................................................................................66 Configuration Steps .................................................................................................67 Account Assignment for Purchase Documents .......................................................68 Account Assignment Category ................................................................................69 Similar Names but Different Entities ...............................................................................69 Item Category ..................................................................................................................70 Item Category Characteristics .................................................................................70 Release Procedure ............................................................................................................70 Release Procedure for PR ........................................................................................71 Release Procedure without Classification for PR .....................................................71 Release Codes ................................................................................................71 Release Indicator ...........................................................................................72 Assign Release Indicator ................................................................................72 Release Points (prerequisites) .........................................................................72 Determine Release Strategy ...........................................................................72 Release Procedure with Classification for PRs.........................................................72 Create Characteristics ....................................................................................72 Create Class and Assign Characteristics to Class ...........................................73 Create Release Groups ...................................................................................73 Create Release Codes .....................................................................................73 Create Release Indicators ...............................................................................73 Create Release Strategies .................................................................................74 Assign Release Codes to a Release Point (Create Workflow) ...........................74 Source Determination .......................................................................................................74 Source Determination Sequence ..............................................................................74 Purchase Documents .......................................................................................................75 Type of Purchase Documents .................................................................................75 Purchase Document Structure ................................................................................75 Document Types .....................................................................................................76 Purchase Document Numbering .............................................................................76 Purchase Document Screens ....................................................................................76 Enjoy Interface .................................................................................................................77 Features of Enjoy Interface .....................................................................................77 Document Overview ..............................................................................................78 viii  ◾  Contents Purchase Requisition .......................................................................................................79 Fund Availability ....................................................................................................79 Parts of a PR ...........................................................................................................80 Request for Quotation ......................................................................................................81 RFQ Document Structure .......................................................................................81 Prerequisites for RFQ .............................................................................................82 RFQ Creation Manually ........................................................................................82 RFQ Creation Using Reference Document ............................................................83 Creating a Delivery Schedule for an RFQ ..............................................................83 Comparing Quotations ...........................................................................................83 Rejecting Quotations ..............................................................................................84 Selecting Quotation ................................................................................................84 Outline Agreement ..........................................................................................................84 Structure of Outline Agreement Document ............................................................85 Creating Outline Agreement Documents ................................................................85 Changing, Cancelling, and Blocking Outline Agreement Document .....................86 Contract ..........................................................................................................................86 Structure of Contract Document ............................................................................87 Central Contracts ...................................................................................................87 Partner Roles ..........................................................................................................88 Item and Account Assignment Categories in Contracts ..........................................88 Distributed Contract ..............................................................................................89 How Distributed Contracts Work ..........................................................................89 Contract Distribution with Classification ...............................................................90 How to Create Contract Distribution with Classification .......................................90 Contract Release Order ..........................................................................................90 Scheduling Agreement ......................................................................................................91 Advantages of Scheduling Agreements .....................................................................91 Item and Account Assignment Categories in Scheduling Agreements ......................91 Procurement Types in Scheduling Agreements ........................................................91 A Scheduling Agreement Document Structure .......................................................92 Creating Scheduling Agreements ............................................................................92 Time Zones in Schedule Lines in Line Items in Scheduling Agreements ................92 Scheduling Agreement Release ...............................................................................93 Messages for SA Release ..........................................................................................94 Scheduling Agreement with Centrally Agreed Contract .........................................94 Purchase Order ................................................................................................................94 Procurement Types in PO.......................................................................................95 PO Creation Scenarios............................................................................................96 Prerequisites for Creating PO .................................................................................96 PO with Zero Value ................................................................................................96 Important Considerations in PO Life Cycle ...........................................................96 Cancelling a PO .....................................................................................................97 Blocking a PO ........................................................................................................97 Monitoring a PO ....................................................................................................97 Archiving of PO .....................................................................................................98 PO with Enjoy Interface .........................................................................................98 Contents  ◾  ix GR-Based Invoice Verification .........................................................................................98 Returns ............................................................................................................................98 Invoicing Plan ..................................................................................................................99 Periodic Invoicing Plan ...........................................................................................99 Partial Invoicing Plan .............................................................................................99 Important Considerations for Invoicing Plans ......................................................100 Automatic Settlement of Invoicing Procedure .......................................................100 5 SAP MM Inventory Management ............................................................................101 Introduction to Inventory Management ..........................................................................101 Inventory Management in a Nutshell ..............................................................................102 Integration Points ...........................................................................................................102 Stock Item versus Consumable Item ...............................................................................103 Movement Types.............................................................................................................104 Material Document ........................................................................................................105 Accounting Document ...................................................................................................106 Quality Management in Inventory Management ............................................................106 Material Status ................................................................................................................106 Goods Movements in SAP MM–IM ..............................................................................106 Goods Receipt ................................................................................................................107 Planning for GR ....................................................................................................107 Planning GR with POs ..........................................................................................107 Planning GR with Production Orders ...................................................................107 Planning GR with Reservations .............................................................................108 Tracking GRs against POs ....................................................................................108 PO Creation for GR .......................................................................................................108 Steps to Create GR from PO .................................................................................108 Steps to Create GR from Shipping Notification .....................................................109 Results of GR ........................................................................................................109 Under/Over Delivery and Final Delivery ...............................................................109 Many GRs per PO Line Item ................................................................................110 GR for Nonvaluated Materials ...............................................................................110 Order Unit of Measure and Unit Price ..................................................................110 Entering a Freight Supplier ....................................................................................111 Shelf Life and Batch Management in GR ..............................................................111 Releasing Material from Blocked Stock .................................................................111 GR for Production Orders .....................................................................................112 GR for By-Products ...............................................................................................112 Other GRs .............................................................................................................112 Goods Issue ....................................................................................................................113 GI General .............................................................................................................113 Account Assignment ..............................................................................................113 GI without Reference Document ...........................................................................114 GI for Scrapping ....................................................................................................114 Taking Sample .......................................................................................................115 GI with Reference to Reservation ..........................................................................115 GI for Production Order ........................................................................................115