202 Pages Qs & Ans

Problem is that after goods receipt and AFTER invoice verification, reversal of goods receipt is being
done. Client wants this more controlled as the GRIR account is being affected. So no reversals to be done
after Invoice verification. How to approach this?
Make this setting: SPRO > Materials Management > Inventory Management and Physical Inventory >
Goods Receipt > For GR-Based IV, Reversal of GR Despite Invoice
Here remove the tick against Mvt 102 & 122.
Now the system will not allow to return the Good at any case. *-- B.Anand daivaraja
I have created a new vendor. Later I found that there were some mistakes and that I want that the
system should not allow me to make any PO or post any entries to this vendor. How to deactivate this
vendor?
You can block a vendor at the following levels:
All company code

Single company code
All Purchase org
Single Purchase org
Where to Get the Goods Movement Type List?
Step 1) Run spro command/TC

Step 2) Then move to "SAP Reference IMG" screen
Step 3) Then navigate following path:
IMG --> Materials Management --> Inventory Management and Physical Inventory --> Movement Types
--> Copy, Change Movement types
Here with "Copy, Change Movement types" option a help tutorial is available (rectangular blue colour
icon). In that go to "Further information" section where you can find a big list of movement types with
some brief explanation.
Where the schedule margin key is customized?
You define the order float in the scheduling margin key, The scheduling margin key is copied from the
material master. The float before production or float after production and the release period are defined
in the scheduling margin key
For Customizing for Shop Floor Control, by choosing Operations --> Scheduling --> Define Scheduling
Margin Key .
The scheduling margin key is assigned to the material ( MRP area in the material master) and is
transferred when the production order is created. These values can be changed in the production order.
What is the function of OBYC?
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Function of the OBYC stand for Configure Automatic Postings. In this step, you enter the system settings
for Inventory Management and Invoice Verification transactions for automatic postings to G/L accounts.
Postings are made to G/L accounts automatically in the case of Invoice Verification and Inventory
Management
transactions relevant to Financial and Cost Accounting.
For example, Posting lines are created in the Stock account and Consumption account.
Tell me what is *make to order*?
Make-to-order production is a process in which a product is individually manufactured for a particular

customer. In contrast to mass production for an unspecified market where a material is manufactured
many times, in make-to-order production a material is created only once though the same or a similar
production process might be repeated at a later time.
In global trade, you often need to process several different kinds of transactions at the same time. The
Trading Execution Workbench (TEW) provides a central cockpit where traders can process trading
contracts and their subcomponents, such as purchase orders and sales orders and follow-on documents.
In addition, TEW automates a large part of the data entry, making processing quicker, easier, and more
error-free.
How to delete a material completely?
Try MMDE transaction but be careful this will remove all material from Client.
What is the use of Tables in MM. i.e. How the tables get created?
Through SE11 you can create a new Table. In MM if you create a Material Master MARA, MARM,
MARC,MARD, MBEW & MVKE will updated. In Vendor Master LFA1, LFB1 & LFM1 will be updated. The
same applies to EKKO,EKPO for P.O, MSEG & MKPF for MIGO & RBKP for MIRO.
If in any error, only the message no. ! or the table no. is shown , then how to resolve the error using
message no. or table no.?
Contact ABAP or BASIS person to resolve this.
How to create new transaction codes?
In transaction code SE93 you can create, Change & Display a Transaction Code.
What are the types of special stocks available?

Subcontracting, consignement, pipeline, project, sales order, RTP, stock transfer ,third party.
2. What are the types of inforecords?
Standard, consignment,subcontracting & pipeline.
3. What is meant by consignment stock?
The stock supplied by the vendor is in the companies premises with the company having no liability for
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the same. The liability for the company will only be affected when the goods are issued from the
consignment stock for use.
4. What are the steps involved in consignment cycle?
Create consignment info record with proper tax code, create Po with item category K, maintain output
condition record for KONS, process GR, no invoice verification done, but settlement is done through
MRKO transaction.
5. Tell me about the subcontracting cycle.
The Po is created with item category L , the goods is transferred to subcontractor by 541 movemet. for
this movement note no accounting docs take place. When GR is done automatically, 543 movemnt takes
place which take care of the consumption of components from stock.
6. How are the byproducts taken care of in subcontracting?
You can add these by products in the BOM for the header matl.
7. What is meant by scales?
Can scales be used in standard purchase order? You can fix a price in the info record for a say qty from
1-100 price RS150 & if the order qty is 101- 500- the prices is 140 . Scales cannot be used directly in PO
but can be pulled into the PO from various master data like info record, quota arrangement.
8. What is the difference between a contract and a scheduling agreement?
With regard to Outline Agreement:
1. You can create the centrally contract (cross-plant) where you can maintain different pricing conditions
for each and every plant
2. You have to create the Release Order with reference to Outline Agreement.
3. No detailed delivery schedule can be made in the Release Order.
4. No Release documentation is created.
5. Only time-dependent conditions can be created.
6. Some Item Category 'M' and 'W' can be used.
With regard to Scheduling Agreement:
1. The Plant Location must be entered in the Scheduling Agreement.
2. We do not have to create any other purchasing document except for delivery schedule line via
Transaction ME38 or MRP running (with the appropriate setting of Source List).
3. Delivery Schedule line items are created subject to your specific requirement.
4. Can create both Scheduling Agreement with and without Release Documentation (subject to the
Document Type LP or LPA) with the selection of either FRC or JIT delivery schedule.
5. Either time-dependent or time-independent conditions can be created subject to the customizing in
the Document Type of the Scheduling Agreement.
6. Item Category 'M' and 'W' can not be used.
9. How does the system calculate taxes?
10. How does the system calculate nondeductible taxes?
11. What is meant by batches? How can the batches be searched?
A batch is a subdivision of your stock of a material having the same characteristics.
For instance:
- food production uses batches to indicate the day of production.
- paint production uses batches based on production date and the used ingredients. It is very hard to
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reproduce the same color in exactly the same way at two different moments.
- ore may be divided in batches based on their mineral content.
You can search batches using the standard search facility (match code, key F4) based on the naming
convention of the batches or, if you use batch classification, based on the characteristics of the batches.
12. How is a shelf-life item managed in SAP? What is the full cycle?
13. What are the settings required for quota arrangement?
To set up a quota arrangement for the procurement of a material, proceed as follows:
Master data -> Quota arrangement -> Maintain, enter the material and plant number, press ENTER to
display the overview screen for the quota arrangement periods, Enter a validity period for quota
arrangement, Enter date until which the quota arrangement is valid. The start date is calculated by the
system. Press ENTER .
Select the quota arrangement and choose Goto -> Item overview to display the item overview screen of
the quota arrangement. Enter a quota arrangement item for each source of supply you want to include
in the quota arrangement.
You must enter the following data.
- Procurement type
- Special procurement type, Enter k in the S column, for example, if a consignment arrangement for the
material exists with the vendor.
- Vendor number
- Procurement plant (supplying plant):
- Quota column, enter the quota assigned to each item.
Press ENTER .
The percentage distribution of the quotas is calculated and displayed automatically by the system.
Save the quota arrangement. The system assigns a number to the quota arrangement item
automatically
14. What is meant by MRP Type and lot sizing?
15. Can it be configured in such a way that the external requisitions can also be taken into account while
MRP runs in consumption-based planning if VB is selected as MRP type?
16. How are free items managed in a PO? yu need to tick the tem as free in the PO. The price will be zero
for such PO's.
17. What are the differences between release procedure with classification and release procedure
without classification? When are they used?
Release procedure with classification means the Purchase requsition can be released both at item level
& at the header level. Release procedure with out classification can also be used for PR which is used for
item level release only. all other external documents cannot be relesed with classification. The two
procedures are mutually exclusive (that is to say, you must decide in favor of one of them only - you
cannot use both).
18. Is it possible to have a release procedure without classification for a PO?
No
19. What is the maximum number of levels available in SAP?
Did not get this question …pls clarify.
20. Is it possible to have scales in a quotation?
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No
21. What is GR blocked stock? When it can be used?
Whenever you are not sure about the quality of the product received, you can put in GR blocked stock.
22. How are the variations in subcontracting taken care of in SAP?
23. How to give specifications for developments?
We normally prepare a business requirement document in which we specify what is required. what field
& tables have to be referred for the required development.
24. How to create PR or PO by MRP?
The PR is created according to the safety stock mentioned for the material or can be triggered from a
requirement . For creating a PO, you need to have the scheduling agreement in place .After the MRP is
run the schedule lines are generated which are nothing but the PO.
I have created a new vendor. Later I found that there were some mistakes and that I want that the
system should not allow me to make any PO or post any entries to this vendor. How to deactivate this
vendor?
You can block a vendor at the following levels:
All company code
Single company code
All Purchase org
Single Purchase org
Where to Get the Goods Movement Type List?
Step 1) Run spro command/TC
Step 2) Then move to "SAP Reference IMG" screen
Step 3) Then navigate following path:
IMG --> Materials Management --> Inventory Management and Physical Inventory --> Movement Types
--> Copy, Change Movement types
Here with "Copy, Change Movement types" option a help tutorial is available (rectangular blue colour
icon). In that go to "Further information" section where you can find a big list of movement types with
some brief explanation.
Where the schedule margin key is customized?
You define the order float in the scheduling margin key, The scheduling margin key is copied from the
material master. The float before production or float after production and the release period are defined
in the scheduling margin key
For Customizing for Shop Floor Control, by choosing Operations --> Scheduling --> Define Scheduling
Margin Key .
The scheduling margin key is assigned to the material ( MRP area in the material master) and is
transferred when the production order is created. These values can be changed in the production order.
What is the function of OBYC?
Function of the OBYC stand for Configure Automatic Postings. In this step, you enter the system settings
for Inventory Management and Invoice Verification transactions for automatic postings to G/L accounts.
Postings are made to G/L accounts automatically in the case of Invoice Verification and Inventory
Management
transactions relevant to Financial and Cost Accounting.
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For example, Posting lines are created in the Stock account and Consumption account.
Tell me what is *make to order*?
Make-to-order production is a process in which a product is individually manufactured for a particular
customer. In contrast to mass production for an unspecified market where a material is manufactured
many times, in make-to-order production a material is created only once though the same or a similar
production process might be repeated at a later time.
In global trade, you often need to process several different kinds of transactions at the same time. The
Trading Execution Workbench (TEW) provides a central cockpit where traders can process trading
contracts and their subcomponents, such as purchase orders and sales orders and follow-on documents.
In addition, TEW automates a large part of the data entry, making processing quicker, easier, and more
error-free.
How to delete a material completely?
Try MMDE transaction but be careful this will remove all material from Client.
What is the use of Tables in MM. i.e. How the tables get created?
Through SE11 you can create a new Table. In MM if you create a Material Master MARA, MARM,
MARC,MARD, MBEW & MVKE will updated. In Vendor Master LFA1, LFB1 & LFM1 will be updated. The
same applies to EKKO,EKPO for P.O, MSEG & MKPF for MIGO & RBKP for MIRO.
If in any error, only the message no. ! or the table no. is shown , then how to resolve the error using
message no. or table no.?
Contact ABAP or BASIS person to resolve this.
How to create new transaction codes?
In transaction code SE93 you can create, Change & Display a Transaction Code.

What are the steps involved in consignment cycle?
Consignment is a type of procurement process. In this process, the vendor makes material available,
which you then manage as consignment stock. A liability only arises when material is withdrawn from
consignment stock, not when the stock is placed in the consignment stores.

1. Material Master record and Vendor should be there.

2. Info record with procurement type consignment should be there.

3. You have to activate the consignment price via info record in SPRO -> Materials Management ->
General settings for materials management --> Activate Consignment Prices via Info Records
4. Here you have to remember that, while placing PO, the price will be zero and the price will be picked
from inforecord.

5. Vendor will supply the goods as per the PO and our company will receive the goods. After receiving
the goods the same will be lying in your company premises, but not belongs to your inventory. It can be
used only after posting to inventory or consuming directly. But will pay for the goods as & when we are
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consuming/posted to inventory to the company.

6. The payment will be made thru MRKO settlements. We can also set for automatic payments thru
batch jobs.

What is a reference purchase organization? When can it be used?

Pur Org:

The purchasing organization is an organizational unit which procures articles and negotiates general
purchase price conditions with vendors. It is responsible for all purchasing transactions in the company.

Ref Pur Org:

In Customizing it is possible to assign reference purchasing organizations to a purchasing organization.
This allows the purchasing organization access to the conditions and contracts of these reference
purchasing organizations. The purchasing organization can make use of up to two reference purchasing
organizations when the sequence in which it accesses conditions is determined.

Std Pur Org:

This standard (default) purchasing organization is used When the source of supply is determined for the
purposes of a stock transfer or consignment, the default purchasing organization is used automatically.
Further purchasing organizations can be assigned to the site in addition to the default. A site cannot
order if it has not been assigned to a purchasing organization.
What are the steps in automatic account assignment configuration?
Define Valuation Classes. (OMSK)

SPRO -> Material Management -> Valuation & Account assignment -> Account Determination -> Account
Determination without wizard -> Define Valuation Classes.

Define Valuation Control. (OMWM)

Determination without wizard -> Define Valuation Control.

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Define Account Grouping for Movement Types (OMWN)

Determination without wizard -> Define Account Grouping for Movement Types.

Group Together Valuation Areas (OMWD)

Determination without wizard -> Group Together Valuation Areas

Configure Automatic Postings (OMWB) or OBYC

Determination without wizard -> Configure Automatic Postings

What is meant by access sequence? When it is used?
An access sequence is a search strategy with the aid of which the SAP System searches for valid
condition records of a certain condition type.

For example, you can stipulate for a price that the SAP System first searches for a price for a specific
plant, and then for a generally applicable price.

For condition types for which you wish to maintain conditions with their own validity period, you must
assign an access sequence. With this, you define which fields the SAP System checks in searching for a
valid condition record.

Example:

An access sequence has been assigned to condition type PB00 so that prices can be maintained in
purchasing info records and contracts.

No access sequence has been assigned to condition type RC00 because it does not have a validity period
of its own. In the standard system, it is always maintained simultaneously with the price and is valid for
the period of the price.

How does the PO pick up the pricing schema?
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The calculation schema picks up using vendor schema (if you assign calculation schema only to vendor
schema then it will pick the same calculation schema for the vendors assigned to particular vendor
schema even though the Pur. Org is different, the condition is the vendor record must be exist in all Pur.
Org) or purchasing org schema (if you assign calculation schema only to purchasing schema then the PO
will pick up same calculation schema for different vendors), or both at time (if you wants separate
pricing for domestic and foreign vendor under one Pur. Org maintain two vendor schemas different for
two vendors and assign it to purchasing org schema).

Special stocks and special procurement types are divided into the following areas:

- Consignment

- Subcontracting

- Stock transfer using stock transport order

- Third-party processing

- Returnable transport packaging

- Pipeline handling

- Sales order stock

- Project stock
creens in Material Master
Various Material Master Screen:
MM01 - Create,
MM02 - Change
MM03 - Display
MM06 - Flag for deletion.
MM04 - Display the changes done to the material master.
MMAM - Change the Material Type. for e.g. from FERT to HALB
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Configure the Material Master Screen MM01 / MM02 / MM03
OMSR - Assign the field to the field group
OMS9 - Maintain the data screen field
Unit of Measure
In the material master, there is a Units of measure button for users to store in the different conversion
rate. This sample program (ZUNT) extract the data from the unit of measure conversion table.
In the Material Master the moving average price are affected by:-
Goods Receipt for Purchase Orders
Transfer from Plant to Plant
Invoice Receipt
Settlement
Price Change
Common configuration changes-
Define new material group (OMSF)
Define new valuation class (OMSK) and automatic posting (OBYC)
Define new material account assignment group (transaction OVK5) and
Customer/Material/Account keys (transaction VKOA)
Here, I will clearly explained how to create COMPANY and COMPANY CODE.
Just follow below as it is.

For e.g.
COMPANY RELIANCE -9001
COMPANY CODE -8001

RELIANCE MOBILE

COMPANY CODE -8002
RELIANCE INSURANCE
PLANT 1
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PLANT 2
PLANT 1
PLANT 2
COMPANY CODE -8001

RELIANCE MOBILE

COMPANY CODE -8002
RELIANCE INSURANCE

PLANT 1
PLANT 2
PLANT 1
PLANT 2
COMPANY CODE -8001

RELIANCE MOBILE

COMPANY CODE -8002
RELIANCE INSURANCE

PLANT 1
PLANT 2
PLANT 1
PLANT 2
Path to create COMPANY:

SPRO IMG <Enterprise structure > <Financial accounting> < Define Company> (select company 1000 and
select copy as give your own company name reliance for example)

Company - 9002
Company Name - Reliance
Enter required field now your own company Reliance is ready.<SAVE>
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Path to create COMPANY CODE:

SPRO IMG <Enterprise structure > < Edit copy, Delete, Check Company Code> <Edit company code data>
<select company code 1000 copy as> and enter your own company name Reliance mobile (like a
number of company code you can assign to your own company)

Company code - 8001
Company Name - Reliance Mobile,
Enter all required fields.

Again same way create one more company code for "Reliance Insurance"
<save>

Now we see How to assign Company code (Reliance mobile) to our Company (Reliance)

SPRO IMG < Enterprise Structure > < Assignment > <Financial Accounting> < Assign Company code to
Company> <select your own company code reliance mobile and enter your F4 fine your company
reliance > <SAVE>
How to configure the system for automatic conversion of Purchase Requisition to Purchase Order?
Ensure automatic purchase order field in Material Master (purchasing view) and Vendor Master is
ticked,Maintain the source list for respective materials and vendor. Also maintain correct data at the
MRP views. On the MRP run system will generate purchase requisitions for the following materials.
Using T-code ME59 conversion of purchase requisition to Purchase orders is possible.
What are the configuration for automatic creation and selection of storage locations in Inventory
Management?
Auto creation of storage location in inventory management can be created with respect to the
movement type and plant.Using t-code OBM2/OBM3.
For automatic storage location selection, storage location data can be specified in procurement storage
location field of MRP view in Material master and Issue storage location field in Bill Of Material.
How to maintain automatic determination of G/L accounts during GR/GI/Transfer posting?
Automatic account determination of GL account can be maintained using T-code OBYC by specifying GL
code for specific valuation class within the posting key(TE-KEY) maintained for respective movement
types.
What is the difference between selection parameter WE101 and WE103?
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To optimize internal processes, you regularly create list displays to inform yourself about the status of
your purchase orders, info records, and other documents in the system.
You are checking the purchase orders issued over the past 24 months. you are primarily interested in
POs against which no goods receipts have been entered.
Choose the scope of list BEST_ALV, so that the list of selected purchase orders is displayed with ALV Grid
Control.
Choose Logistics --> Materials Management --> Purchasing --> Purchase Order --> List Displays --> For
Vendor (ME2L).
Selection parameter : WE101 (open goods receipt)
WE103 means then that SAP considers the GR blocked stock as well as already received quantity while
with WE101 the GR blocked stock is not considered as received.
What is the diffrence between XD01, XK01 & MK01? Knowing that all the above tax codes are used to
create vendor.
There are 3 t-codes by which you can create vendor:
XK01 is for centrally creating vendor where all data are included.
MK01 is for purchasing vendor.
FK01 is for accounting vendor or vendor with accounting details.
PRICE DETERMINATION PROCESS or PRICING PROCEDURE
CONDITIONS OR PRICING PROCEDURE or PRICE DETERMINATION PROCESS

We deal with the Pricing Procedure for vendors.
PB00 Gross Price (info record, contract, scheduled Agreement)
PBXX Gross Price (PO)
FRA1 Freight
RA00 Discount on net
RA01 Discount on Gross
ZA00 Surcharge on net
SKT0 Surcharge / discount
ZPB0 Rebates
MWVS Input Tax
MWAS Output Tax
BASB Base Amount
RM0000 Calculation Schema or Pricing Procedure
(PB00 & PBXX)
RM0002 Calculation Schema or Pricing Procedure
(PB00)
PB00 --> AB00
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Copy the Standard one and create new one (ours)
RM0000 contains all the condition types
Pricing Procedure (PP)
We define the pricing procedure to define condition supplement for the material price. The condition
supplement specifies the discount, surcharge, freight etc that we want a system every time to access
material price condition records.
The total value of the material is calculated or based on all addition and subtraction i.e. discounts,
surcharge, tax freight etc
Condition Table
It is a table, which defines the structure of condition record key.
Condition Record
It is a data record used to store conditions or condition supplements, i.e. condition like, discount,
freight, and surcharge, Tax etc.
Condition Type
It is used for different functions. In Pricing the condition types leads you to differentiate different types
of discounts, in output determination, batch determination, difference between two output types, such
as delivery note or orderconfirmation, between different strategy types
Access Sequence
It specifies the order in which system searches or access the condition records from condition table
Difference between PB00 & PBXX

1. Condition maintained in PB00 is time dependent whereas PBXX is time independent.
2. Condition type PB00 – used for IR, RFQ, Contract, Schedule Agreement
Condition type PBXX – used for PO.
Calculation Schema
The main function of calculation schema is to provide framework of steps for the price determination
process to specify the discounts, surcharge, freight rebate etc.
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It also determines the sequence of conditions that are to be followed and in which sequence.
Schema Group Vendor

The main function of it is to identify or to pick the right process and conditions for a particular vendor.
Schema Group Purchasing Organization

Key that determines which calculation schema (pricing procedure) is to be used in purchasing
documents assigned to the relevant purchasing organization.
Schema Group
It allows to group together the purchasing organizations, which uses the same calculation schema.
Steps: -
1. Create Access sequence
2. Create condition types
3. Create pricing procedure or calculation schema
4. Link pricing procedure & access sequence to condition type
5. Create schema group for vendor
6. Create schema group for purchase organization
7. Assign schema group vendor-to-vendor master record in purchasing data view
8. Assign schema group purchase organization to our purchase organization
9. In inforecord purchase organization data enter condition types and pricing or calculation procedure
CUSTOMIZE SETTINGS: -
SPRO --> IMG-->MM-->PUR-->Conditions -->Define price determination Process
1. Define access sequence
2. Define Condition type
3. Define cal. Schema
4. Define schema group
o Schema group vendor
o Schema group purchasing group
5. Assignment of schema group to PUR org
6. Define schema determination à determine cal schema for standard PO.
ITEM CATEGORY (I)

In terms of MM – PUR: -An identifier indicating the characteristics of an item.
The item category determines whether the following are mandatory or permitted for an item:
Material Number, Account assignment, Inventory Management in the SAP system, Goods Receipt
& Invoice Receipt
In terms Advertising Management (IS-M-AM):
Characteristics that defines sales relevant features of document items including planning, pricing,
production, billing etc
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Item category plans a vital role in MM. It is a key, which determines how the procurement of the
material & services is to be controlled for the particular item.
Depending upon the item categories the scenario of purchasing documents varies / changes.
Document types of item category: -
1. Standard
2. L – Sub contracting
3. K – Consignment
4. B – Limit
5. U – Stock Transfer
6. D – Services
7. T – Text
8. S – Third Party
Account Assignment Category (A): -
It determines which A/C Assignment data is necessary or required for the particular item
Different Types: -
1. 1 - Third Party
2. P - Projects
3. K – Cost Center
4. A - Asset
5. C - Sales order
6. U - Unknown etc.
Physical Inventory and Inventory Management
Physical inventory Process: -
1. Create Physical inventory document
T Code MI01 – Create single inventory document
T Code MI31 – Create multiple physical inventory documents
I. Enter the desired fields i.e. material, material type, site, storage location, and Maximum number items
/ Documents – 100, etc �� Press Enter
II. Click on Process Session
III. Select the line items and click on the process
IV. System displays a dialog box, select Background and click on process. Inventory document is created
2. Print Inventory Document and handed over to responsible person say Manager
3. Enter Physical Inventory count
T Code MI04
i. Enter the physical inventory document number Fiscal year, count date �� Press enter
ii. Enter the Material Quantity and click on post
4. Listing of difference
T Code MI20
Enter the physical inventory document number and execute, system displays a screen, wherein we will
be able to view the differences
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5. Post the differences
T Code MI07 & Mov Type 701 & 702
Enter the physical inventory document number, year, posting date, enter the difference and post
INVENTORY MANAGEMENT
Maintaining stock by value or by quantity is called inventory. The total inventory management deals
with the goods movement of the material.
Goods movement: -
It is a process in which transaction resulting change in stocks. It is further sub-divided into three
categories
1. Goods Receipt (GR)
2. Goods Issue (GI)
3. Transfer Posting (TP)
Goods Receipt (GR): - It is a goods movement in which receipt of goods is posted for vendor or for
production. A GR posted in the system will leads to increase in stock. No Concept of Price or value
Goods Issue (GI): - It is goods movement in which material withdrawal is posted for consumption or for
customer. A GI posted in system will leads to decrease in stock.
Stock Transfer (ST): - It is method of removal of material from one location and transferring it to another
location. This process is performed between two plants and two storage locations.
Transfer Posting (TP): - It is a general term of stock transfer that changes the stock type or stock
categories. The difference between transfer posting and stock transfer is: -
TP is logical stock transfer and ST is a physical stock transfer.
Movement Type: - It is a three-digit code, which plays a role of important control function
in inventory management. It acts as a central role in automatic account determination. It determines
which stock account or consumption account is updated in financial accounting.
Reservation: - It stores requisition created from particular cost center to particular department for
issuing the material reservation posted in the system. It leads to decrease in stock.
Stock Types: - The different stock types are
1. Unrestricted use stock
2. Quality inspection stock
3. Blocked stock
4. Warehouse stock
Transaction code: -
1. To Create GR - MIGO
2. To Create GI - MB1A
3. For Transfer Posting - MB1B
4. To display Material/GR document – MB03
5. To create reservations - MB21, MB22, MB23
6. To See Stock Overview - MMBE
7. To enter Other GR - MB1C
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When GR is posted in the system
1. Material document is created - MB03
2. Accounting Document is generated - MB03
3. MMR updated - MM02, MM03
4. PO history updated - ME23N
Movement Type’s
Movement Types under GR - 101, 331,333,335,501,503,505,551,553,555,
561,351 (For all Mov Type’s there is a reversal e.g. 101 has 102. Note: No reversal for 121)
Movement Type’s under GI - 201, 331,333,335,551,553,555
Transfer Posting: It is performed in three ways
1. TP B/W Plant to Plant
2. TP B/W Storage Location to Storage Location
3. TP B/W Stock to Stock
Movement Types under TP B/W Plant to Plant
301 - 1 step
303 & 305 - 2 step
Movement Type under TP B/W Storage location to Storage Location
311 - 1 step
313 & 315 - 2 step
Movement Type under TP B/W stock to stock
321, 323, 325, 343,349
To Cancel the GR Movement type 102
Return delivery to vendor movement type 122 & T Code MIGO
Transfer Posting Stock to Stock

From Blocked stock to Quality Inspection
T Code MB1B & Movement Type 349
From Blocked stock to Unrestricted Stock
From Quality Inspection to Unrestricted Stock
Transfer Posting from Plant to Plant

For One Step: Movement Type 301
For Two Steps: Movement Type 303 & 305
After posting stock will display in Stock in Transit (Plant)
To receive material by receiving Plant Movement Type 305
Transfer Posting B/W Storage Location to Storage Location

Under One Plant B/W two Storage Location’s Movement Type 311
18 | P a g e
Back to Parent storage Location Movement Type 313 (It Show stock in transfer) use Movement type 315
at Parent storagelocation
To create Goods Issue (GI) T Code MB1A & Movement Type 201
To Create Reservations T Code MB21, MB22 & MB23
Creation of GI w.r.t Reservations
T Code MB1A & Movement Type 201
Click on Reservation, Enter Reservation Number �� Click on Adopt + Details
GR w.r.t Reservations: T Code MIGO & Select as Reservation instead of GR
GR without PO Movement type 501 & T Code MB1C, Select others instead of Purchase order, Enter
Material, Quantity, Plant, Storage Location �� Press Enter
Partner Option will be visible (Vendor) �� Save it
Invoice: - Invoice is a document, which is issued to a buyer (Company) from the supplier (vendor) for the
payment. The following information is maintained in invoice
Invoice date, Posting date, Invoice ref number, tax amount, amount, tax code, terms of payments,
vendor address, bankingaccounting information etc
When invoice document is posted in the system

• Invoice document created
• Accounting document is generated (MIR4)
• PO history updated (ME23N)
• FI document created (FB03)
SPECIAL STOCKS & SPECIAL PROCUREMENT TYPES
Special Stocks are those stocks which are not belongs to our company code. These are not placed in
our storage locations & no physical inventory is performed and treated as special stocks for the reason
of ownership.
Different types are of Special Stocks are as follows
1. Subcontracting
2. Consignment
3. Pipeline
4. Stock transfer
5. Third party
6. Returnable transport packaging
7. Sales order stock
8. Project stock
SUBCONTRACTING:
19 | P a g e
In subcontracting process we create subcontracting PO to supply or issue subcomponents to vendor in
order to get final product. The price maintained in subcontracting PO is a service charge paid to vendor.
Steps to perform subcontracting:
1. Create subcontracting inforecord (Optional)

2. Create subcontracting PO with item category L,
There are to ways to supply subcomponents to vendor
• Manually maintain the subcomponents in the subcontracting PO though explode BOM
• Through BOM (Bill of material) T Code CS01, CS02 & CS03
3. Create Transfer Posting with Movement Type 541 to issue the subcomponents to the vendor
4. Goods Reciept
5. Invoice Reciept
Path: ME21N ---> Enter Item Category L -->, Material (End Product), PO Quantity, Delivery Date, Net
Price, Plant --> Click on Item Details --> Tab Material Data -- >Components, select Explode BOM --> Click
on Components button --> Enter the subcomponents --> Go back & Save.
Create Transfer Posting with movement type 541 & T Code MB1B
GR: MIGO
IR: MIRO
CONSIGNMENT: - (No Concept of Invoice)
In consignment process we will not create Purchasing document for the vendor, vendor himself send the
material to our plant, though the material is available to our plant, the responsibility & ownership of the
material is of vendor. Aliability only arises when the material withdrawal (Consumption) is posted in the
system from consignment stock.
Steps:
1. Create Consignment info record (mandatory)
2. Create Consignment purchase order with item category ‘K’ & maintain Info record number
3. Create GR Movement type ‘101K’
4. Create GI Movement Type ‘201K’
5. Consignment settlement T Code MRKO
20 | P a g e
Path : -->ME11 --> In info record --> Purchasing Org Data 1 views of info record enter the tax code and
save it
--> Create Consignment Purchase Order ME21N (Price option is grayed out with price zero)
--> Create GR with movement type 101K
--> Create Goods Issue (GI) T Code MB1A & Movement Type 201K Enter Cost center vendor
--> Consignment Settlement T Code MRKO Click Activate Consignment Activate Settle Execute
--> Display the Document Number i.e. Invoice receipt T Code FB03
PIPELINE PROCESS: (No Concept of Invoice)
In pipeline handling your company does not need to order or store the material concerned. It is ready
available to you as and when required via pipeline (e.g. oil or water), or some other type of cable (e.g.
electricity). Consumption of the material is settled with the vendor on a regular basis.
Steps:
1. Create a Material master record with material type PIPE
2. Create Pipeline info record
3. Create GI with movement type 201P
4. Pipeline settlement T Code MRKO
RETURNABLE TRANSPORT PACKAGING (RTP):
When company orders goods from a vendor, the goods are delivered with returnable transport
packaging (pallets, containers) that belongs to the vendor and is stored on our premises until you return
it to the vendor.
Steps:
1. Create Material master record with material type LEIH
2. Create PO
3. Create GR by maintaining RTP material by selecting the option transport equipments with movement
type 501M.
4. IR
21 | P a g e
STOCK TRANSFER:
In stock transfer processing, goods are procured and supplied within a company. One plant orders the
goods internally to another plant (receiving plant/issuing plant). The goods are procured with a special
type of purchase order the stock transport order.
Steps:
1. Create a Material master in both supplying and receiving plant
2. Create stock transport order (STO) with item category ‘U’
3. Create transfer posting with movement type 351 & T Code MB1B (Go to MMBE stock overview, the
stock will decrease in supplying plant and it will not update stock of receiving plant, it will be under stock
in transit)
4. Create GR stock will update in receiving plant
This scenario is under one company code between two plants.
Organization Structure
Organization Structure
22 | P a g e
Note: - {1 Sales Org + 1 Distribution Channel + 1 Division = Sales Area}
Client: It is a logical unit or independent unit, which is used for to organize a specific organization data.
IMPLEMENTATION PROCESS
First we have to prepare documentation about the client business (like turnover, vendors, customers,
payments, materials, production, marketing etc.)
The implementer company made two teams (1.) Steering team. (2.) Steering community
Steering team (SAP functional consultants) prepares a detailed documentation about the client with the
help of core team (client company team) & this study is known as Feasibility Study. After that the
steering team handed over this documentation to Steering community (Project manager, Sr.
software engineer, and other higher authorities).
Steering community prepares the BBP (Business Blue Print). BBP Prepares in MS-Word
• ASAP: - Accelerated System Application Product in Data Processing.
23 | P a g e
• Business Process: - ASAP Methodology
1. Project Preparation
2. BBP (Business Blue Print)
3. Realization
4. Final Preparation
5. Go live & Support
• Project Preparation: -
It consists of identifying team members & development strategy as how to go.
AS – IS (Existing Process followed, requirements)
TO – BE (Requirement analysis and best process recommended)
Difference between (AS – IS) & (TO - BE) is called GAP Analysis.
• Business Blue Print (BPP): -

It is a legal documentation between client & the company (implementer / service provider). We have to
understand the current business process of client & analyzing the business & prepare documentation. It
is a detailed documentation for the client.
• Realization: -
This Phase is used to Implement or migrate the entire business of client from Non-SAP environment to
SAP environment
• Final Preparation: -
This phase is used for testing & end user training. After successfully completion of this phase client is
ready to run business in SAP R/3.
• Go live & Support: -

In this phase we deliver the project end date & end user training at client site.
General Terms (Basics)

• Client setup is done by BASIS (Business Administration System Integrated Software)
It is a logical unit or independent unit, which is used to organize a specific organization data
Company, Company Code & Controlling Area are created by SAP FI/CO consultant
• Sales Part is done by SAP SD consultant

{1 Sales Org + 1 Distribution Channel + 1 Division = Sales Area}
• Rest is done by SAP MM consultant (Plant, Storage location, Pur Org., Ref Pur Org)
• IDES: - Internet Demonstration Evaluated System. (Complete SAP System used for educational
24 | P a g e
purpose)
• IMG: - Implementation guide (Customizing purpose)
• Maximum number of screen or sessions can be opened is 6.
Transaction Code: - /N (T.Code) Closes the current session & opens the new session.
Transaction Code: - /O (T.Code) Minimizes the current screen & opens new session.
• Difference between SAP 4.7 & ECC 5.0, ECC 6.0

ECC 5.0 & ECC 6.0 has its own database SAP DB, MAX DB
Path of SPRO
SAP EASY ACCESS --> TOOLS --> CUSTOMIZING --> IMG --> SPRO
Material Master Related Important Terms (Part 1)
Material Group
Key that you use to group together several materials or services with the same attributes, and to assign
them to a particular material group.
Use: You can use material groups to:
• Restrict the scope of analyses
• Search specifically for material master records via search helps
Purchasing Group
Key for a buyer or a group of buyers, who is/are responsible for certain purchasing activities
Use
• Internally, the purchasing group is responsible for the procurement of a material or a class of
materials.
• Externally, it is the medium through which contacts with the vendor are maintained.
Purchasing Value Key

Key defining the reminder days and tolerance limits valid, as well as the shipping instructions and order
acknowledgment requirement of the material for Purchasing.
Procedure: If you have chosen a purchasing value key, the system enters the values defined in
Customizing (for Purchasing) in the fields.
Batch Batches (LO-BM)
A subset of the total quantity of a material in stock, managed separately from other subsets of the same
material.
Example: Different production lots (such as paints, dyes, wallpapers, and pharmaceutical products),
delivery lots, quality grades of a material.
25 | P a g e
Batch management requirement indicator, Specifies whether the material is managed in batches.
Use:
This indicator can be set in the material master record manually or, if batches are valuated individually,
it is set automatically for the plants concerned, in which case it cannot be changed.
The indicator cannot be changed if stocks exist in either the current period or in the previous period. The
reason for checking the previous period is because stocks can be posted to this period when goods
movements are entered.
Material Master Related Important Terms (Part 1)
Material Group
Key that you use to group together several materials or services with the same attributes, and to assign
them to a particular material group.
Use: You can use material groups to:
• Restrict the scope of analyses
• Search specifically for material master records via search helps
Purchasing Group
Key for a buyer or a group of buyers, who is/are responsible for certain purchasing activities
Use
• Internally, the purchasing group is responsible for the procurement of a material or a class of
materials.
• Externally, it is the medium through which contacts with the vendor are maintained.
Purchasing Value Key

Key defining the reminder days and tolerance limits valid, as well as the shipping instructions and order
acknowledgment requirement of the material for Purchasing.
Procedure: If you have chosen a purchasing value key, the system enters the values defined in
Customizing (for Purchasing) in the fields.
Batch Batches (LO-BM)
A subset of the total quantity of a material in stock, managed separately from other subsets of the same
material.
Example: Different production lots (such as paints, dyes, wallpapers, and pharmaceutical products),
delivery lots, quality grades of a material.
Batch management requirement indicator, Specifies whether the material is managed in batches.
Use:
This indicator can be set in the material master record manually or, if batches are valuated individually,
it is set automatically for the plants concerned, in which case it cannot be changed.
The indicator cannot be changed if stocks exist in either the current period or in the previous period. The
reason for checking the previous period is because stocks can be posted to this period when goods
movements are entered.
26 | P a g e
SAP IMPLEMENTATION PROCESS / End to End Inplementation of SAP
First we have to prepare documentation about the client business (like turnover,
vendors, customers, payments, materials, production, marketing etc.)
The implementer company made two teams (1.) Steering team. (2.) Steering
community
Steering team (SAP functional consultants) prepares a detailed
documentation about the client with the help of core team (client company team)
& this study is known as Feasibility Study. After that the steering team handed
over this documentation to Steering community (Project manager, Sr. software
engineer, and other higher authorities).
Steering community prepares the BBP (Business Blue Print). BBP
Prepares in MS-Word
�� ASAP: - Accelerated System Application Product in Data Processing.

�� Business Process: - ASAP Methodology
1. Project Preparation
2. BBP (Business Blue Print)
3. Realization
4. Final Preparation
5. Go live & Support
�� Project Preparation: -
It consists of identifying team members & development strategy as
how to go.
AS – IS (Existing Process followed, requirements)
TO – BE (Requirement analysis and best process recommended)
Difference between (AS – IS) & (TO - BE) is called GAP Analysis.
�� Business Blue Print (BPP): -

It is a legal documentation between client & the company
(implementer / service provider). We have to understand the current business
process of client & analyzing the business & prepare documentation. It is a
detailed documentation for the client.
�� Realization: -
This Phase is used to Implement or migrate the entire business of
client from Non-SAP environment to SAP environment
�� Final Preparation: -
This phase is used for testing & end user training. After successfully
completion of this phase client is ready to run business in SAP R/3.
27 | P a g e
�� Go live & Support: -
In this phase we deliver the project end date & end user training at
client site.
label Subcontracting. Show all posts
SPECIAL STOCKS & SPECIAL PROCUREMENT TYPES
Special Stocks are those stocks which are not belongs to our company code. These are not placed in
our storage locations & no physical inventory is performed and treated as special stocks for the reason
of ownership.
Different types are of Special Stocks are as follows
1. Subcontracting
2. Consignment
3. Pipeline
4. Stock transfer
5. Third party
6. Returnable transport packaging
7. Sales order stock
8. Project stock
SUBCONTRACTING:
In subcontracting process we create subcontracting PO to supply or issue subcomponents to vendor in

order to get final product. The price maintained in subcontracting PO is a service charge paid to vendor.
Steps to perform subcontracting:
1. Create subcontracting inforecord (Optional)

2. Create subcontracting PO with item category L,
There are to ways to supply subcomponents to vendor
• Manually maintain the subcomponents in the subcontracting PO though explode BOM
• Through BOM (Bill of material) T Code CS01, CS02 & CS03
3. Create Transfer Posting with Movement Type 541 to issue the subcomponents to the vendor
4. Goods Reciept
5. Invoice Reciept
28 | P a g e
Path: ME21N ---> Enter Item Category L -->, Material (End Product), PO Quantity, Delivery Date, Net
Price, Plant --> Click on Item Details --> Tab Material Data -- >Components, select Explode BOM --> Click
on Components button --> Enter the subcomponents --> Go back & Save.
Create Transfer Posting with movement type 541 & T Code MB1B
GR: MIGO
IR: MIRO
CONSIGNMENT: - (No Concept of Invoice)
In consignment process we will not create Purchasing document for the vendor, vendor himself send the
material to our plant, though the material is available to our plant, the responsibility & ownership of the
material is of vendor. Aliability only arises when the material withdrawal (Consumption) is posted in the
system from consignment stock.
Steps:
1. Create Consignment info record (mandatory)
2. Create Consignment purchase order with item category ‘K’ & maintain Info record number
3. Create GR Movement type ‘101K’
4. Create GI Movement Type ‘201K’
5. Consignment settlement T Code MRKO
Path : -->ME11 --> In info record --> Purchasing Org Data 1 views of info record enter the tax code and
save it
--> Create Consignment Purchase Order ME21N (Price option is grayed out with price zero)
--> Create GR with movement type 101K
--> Create Goods Issue (GI) T Code MB1A & Movement Type 201K Enter Cost center vendor
--> Consignment Settlement T Code MRKO Click Activate Consignment Activate Settle Execute
--> Display the Document Number i.e. Invoice receipt T Code FB03
PIPELINE PROCESS: (No Concept of Invoice)
In pipeline handling your company does not need to order or store the material concerned. It is ready
29 | P a g e
available to you as and when required via pipeline (e.g. oil or water), or some other type of cable (e.g.
electricity). Consumption of the material is settled with the vendor on a regular basis.
Steps:
1. Create a Material master record with material type PIPE
2. Create Pipeline info record
3. Create GI with movement type 201P
4. Pipeline settlement T Code MRKO
RETURNABLE TRANSPORT PACKAGING (RTP):
When company orders goods from a vendor, the goods are delivered with returnable transport
packaging (pallets, containers) that belongs to the vendor and is stored on our premises until you return
it to the vendor.
Steps:
1. Create Material master record with material type LEIH
2. Create PO
3. Create GR by maintaining RTP material by selecting the option transport equipments with movement
type 501M.
4. IR
STOCK TRANSFER:
In stock transfer processing, goods are procured and supplied within a company. One plant orders the
goods internally to another plant (receiving plant/issuing plant). The goods are procured with a special
type of purchase order the stock transport order.
Steps:
1. Create a Material master in both supplying and receiving plant
2. Create stock transport order (STO) with item category ‘U’
3. Create transfer posting with movement type 351 & T Code MB1B (Go to MMBE stock overview, the
stock will decrease in supplying plant and it will not update stock of receiving plant, it will be under stock
in transit)
4. Create GR stock will update in receiving plant
30 | P a g e
This scenario is under one company code between two plants.
SAP Inventory Management Movement Type 1
Below you will find a short description of the standard movement types. The reversal movement type is
the movement type + 1 (reversal of 101 = 102).
101 Goods receipt for purchase order or order
If the purchase order or order has not been assigned to an account, a stock type (unrestricted-use stock,
stock in quality inspection, blocked stock) can be entered during goods receipt.
If the purchase order or order has been assigned to an account, the goods receipt is not posted to the
warehouse, but to consumption.
In the case of non-valuated materials, the goods receipt is posted to the warehouse, although the
purchase order has not been assigned to an account.
Possible special stock indicators:
K Goods receipt for purchase order to consignment stock
O Goods receipt for purchase order to stock of material provided to vendor
E GR for purchase order or order to sales order stock
Q GR for purchase order or order to project stock.
Goods receipt for subcontract order: at goods receipt, the consumption of the components is posted at
the same time (see movement type 543)
Goods receipt for stock transport order: at goods receipt the transported quantity is posted in the
receiving plant from stock in transit into unrestricted-use stock (stock in quality inspection or blocked
stock).
103 Goods receipt for purchase order into GR blocked stock
You cannot receive goods into goods receipt blocked stock for stock transport orders.
K, O, E, Q
105 Release from GR blocked stock for purchase order
Movement type 105 has the same effects as 101.

K, O, E, Q
107 Goods receipt to valuated GR blocked stock
31 | P a g e
This goods movement corresponds to a valuated movement type 103.
None
109 Goods receipt from valuated GR blocked stock
This goods movement corresponds to a non-valuated movement type 105.

None
121 Subsequent adjustment for subcontracting
This movement type cannot be entered manually.

With a subsequent adjustment for a subcontract order it is possible to correct the consumption of
components. In this case, the material produced by the supplier is credited with the excess consumption
/ under-consumption. For this reason, if there is a subsequent adjustment, an item is generated for the
produced material using movement movement type 121.
Movement type 121 does not have a reversal movement type.
O, E, Q
122 Return delivery to supplier or to production
Using movement type 122, you can distinguish real return deliveries for a purchase order or order from
cancellations (102).
In the standard version, you must enter a reason for the return delivery if you are using movement type
122. This enables you to carry out evaluations for return deliveries.
The effects of movement type 122 correspond to a cancellation of movement type 101.
K, O, E, Q
123 Reversal of return delivery
If you returned a goods receipt using movement type 122, you can reverse the return delivery using
movement type 123. This movement type has the same effects as movement type 101.
K, O, E, Q
124 Return delivery to vendor from GR blocked stock
Using movement type 124, you can return a goods receipt to GR blocked stock ( 103).
Movement type 124 has the same effects as movement type 104.
K, O, E, Q
32 | P a g e
125 Return delivery from GR blocked stock - reversal
If you returned a goods receipt to GR blocked stock using movement type 124, you can reverse the
return delivery using movement type 125.
K, O, E, Q
131 Goods receipt for run schedule header
This movement type cannot be entered manually. It is generated automatically at notification of goods
receipt for a run schedule header .
E, Q
141 Goods receipt for subsequent adjustment for active ingredient
This movement type cannot be entered manually. It is generated automatically upon subsequent
adjustment for a proportion/product unit . Subsequent adjustment is necessary if the system finds that
there has been excess consumption or under-consumption after a goods receipt posting.
K, O, E, Q
161 Return for purchase order
If a purchase order item is marked as a returns item, the returns to vendor are posted using movement
type 161 when the goods receipt for purchase order ( 101) is posted.
K, O, E, Q
201 Goods issue for a cost center
The goods can only be withdrawn from unrestricted-use stock.

K: Goods withdrawal from consignment stock
P: Goods withdrawal from the pipeline
If you have withdrawals from consignment stock and from pipeline, payables to suppliers ensue.
221 Goods issue for a project

K, Q
33 | P a g e
231 Goods issue for a customer order (without Shipping)
You use this movement type if you want to process the delivery without Shipping.
E, K, Q
241 Goods issue for an asset

K
251 Goods issue for sales (without customer order)
Use this movement type if you have not entered a customer order in SD. In the standard system, the
movement is assigned to a cost center.
K
261 Goods issue for an order
This refers to all withdrawals for orders (for example,

DS:GLOS.3526C388AFAB52B9E10000009B38F974>production orders, maintenance orders ), with the
exception of customer orders.
E, K, P, Q, W
The goods issue can be posted manually in Inventory Management or automatically when an order is
confirmed or via a delivery in Shipping.
281 Goods issue for a network

The goods issue can also be posted via a delivery in Shipping.
E, K, P, Q
291 Goods issue for any arbitrary account assignment
With this movement type, all account assignment fields are ready for input. You can assign the
movement to any arbitrary account assignment object.
E, K, P, Q
34 | P a g e
AP Inventory Management Movement Type 2
301 Transfer posting plant to plant in one step
The quantity is transferred from unrestricted-use stock in the issuing plant to unrestricted-use stock in
the receiving plant.
E, O, Q, V, W
303 Transfer posting plant to plant in two steps - removal from storage
The quantity is transferred from unrestricted-use stock of the issuing plant to stock in transfer in the
receiving plant.
For technical reasons, you cannot carry out transfer postings from plant to plant in two steps for split
valuation materials.
Removal from storage can be posted with movement type 603 via Shipping.
None
305 Transfer posting plant to plant in two steps - placement in storage
The quantity is posted from stock in transfer to unrestricted-use stock in the receiving plant. The
movement is not valuated.
You can use movement type 605 in Shipping to post the goods receipt with reference to the delivery.
None
309 Transfer posting material to material
The quantity is posted from unrestricted-use stock of the issuing material into unrestricted-use stock in
the receiving material.
Prerequisite: both materials have the same stockkeeping unit.
E, O, Q, V, W
311 Transfer posting storage location to storage location in one step
The quantity is transferred from unrestricted-use stock of the issuing storage location to unrestricted
use in the receiving storage location.
E, K, M, Q
See also 321, 343, 349, and 455 for other stock types
35 | P a g e
313 Stock transfer storage location to storage location in two steps - removal from storage
The quantity is transferred from unrestricted-use stock of the issuing storage location to stock in
transfer in the receiving storage location.
None
315 Transfer posting storage location to storage location in two steps - placement in storage
In the receiving storage location, the quantity is transferred from the stock in transfer to the
unrestricted-use stock.
None
317 Putting together a structured material from its constituent components (Retail)
A material split up into its components using movement type 319 can be put together again using
movement type 317.
The effects of movement type 317 correspond to a reversal of movement type 319.
None
319 Splitting up structured material into components (Retail)
You can enter the splitting up of a structured material manually using movement type 319.
You can configure Customizing so that a structured material (for example, a set, prepack, or display is
automatically split up into its components at the time of goods receipt. The system posts the split using
movement type 319. In this process, the BOM header material is posted and each of the component
stocks are increased. You can also use this function if you use the Warehouse Management System (LE-
WM).
None
Example:
A box of the structured material S contains 3 pieces of the component K1 and 4 pieces of the component
K2. The following material document items result after the material is split up upon goods receipt:
Qty Unit Material Movement type
1 box S 101 +
1 box S 319 -
4 piece K1 319 +
5 piece K2 319 +

321 Transfer posting stock in quality inspection - unrestricted-use stock
36 | P a g e
The quantity is transferred from stock in quality inspection into unrestricted-use stock. Here you can
post the quantity to another storage location.
You cannot use this movement type for QM-managed materials since transfer posting for these
materials takes place via the usage decision.
E, K, O, Q, V, W
323 Transfer posting storage location to storage location - stock in quality inspection
The quantity is transferred from stock in quality inspection in the issuing storage location into stock in
quality inspection in the receiving storage location.
E, K, Q
325 Transfer posting storage location to storage location - blocked stock
The quantity is transferred from blocked stock in the issuing storage location into blocked stock in the
receiving storage location.
E, K, Q
331 Withdrawal of sample from stock in quality inspection
The sample is destructive, that is, the withdrawal has the same effects as scrapping.
E, K, Q, V, W
333 Withdrawal of sample from unrestricted-use stock
E, K, Q, V, W
335 Withdrawal of sample from blocked stock
E, K, Q
340 Revaluation of batch
Using this movement type, you can change a batch's valuation type. The system automatically calls up
this movement type when you want to revaluate a batch by choosing Logistics -> Central Functions ->
Batch Management -> Batch -> Change (transaction code MSC2N). There is no reversal movement type.
E, Q
37 | P a g e
341 Change in status of a batch (available to unavailable)
This goods movement is automatically created when there is a change in the status of a batch and it is
also used to transfer the unrestricted-use stock into restricted-use stock.
E, K, M, O, Q, V, W
343 Transfer posting blocked stock - unrestricted-use stock
The quantity is transferred from blocked stock to unrestricted-use stock. You can also post the quantity
to another storage location.
E, K, Q
349 Transfer posting from blocked stock to stock in quality inspection
The quantity is transferred from blocked stock to stock in quality inspection. Here you can transfer the
quantity to another storage location.
E, K, Q
351 Goods issue for a stock transport order (without Shipping)
The quantity is transferred from unrestricted-use stock in the issuing plant to stock in transit in the
receiving plant.
Movement type 351 is only used if the goods issue is posted without a delivery in Shipping. A goods
issue for a stock transport order with delivery in Shipping is posted using movement types 641, 643, 645,
or 647 .
The transfer posting is also possible for materials with split valuation.
The goods issue for a stock transport order takes place using movement type 101.
E, Q
For special stock indicators E and Q and for purchase orders assigned to an account, ensure that the
quantity is not posted to the stock in transit in the receiving plant.
411 Transfer posting of special stocks E, K, and Q to company's own stock
The quantity is transferred from unrestricted-use special stock E ( sales order stock), unrestricted-use
stock K ( consignment stock) and unrestricted-use special stock Q ( project stock) to unrestricted-use
storage location stock. The corresponding special stock indicator is required for this movement.
If you do not use the special stock indicator, the system uses this movement type and movement type
311.
For sales order stock, you can change the material number for this movement if you manage the
material in your company's own stock under a different material number (for example, for configurable
38 | P a g e
materials).
Consignment stock is transferred to valuated stock, thus resulting in a vendor liability.
413 Transfer posting to sales order stock
You can use this movement type to carry out a transfer posting from your own unrestricted-use stock,
other sales order stock, consignment stock, and project stock to a sales order stock.
E, K, Q
415 Transfer posting to project stock
You can use this movement type to carry out a transfer posting from your own unrestricted-use stock,
consignment stock, and other project stock to a project stock.
E, K, Q
441 Transfer posting non-tied to tied empties
Part of the stock of an "empties" material assigned to a full product is managed in the stock type "tied
empties".
Empties stock not assigned to a full product forms part of the stock type "unrestricted-use".
Using movement type 441, you can make a transfer posting for an empties material from the stock type
"unrestricted-use" to the stock type "tied empties". Movement type 442 reverses this transaction.
Example:
The full product "beer" has a stock of 15 cases. Part of the empties components "bottle" and "case" is
tied empties stock.
Material unrestricted-use tied empties
Beer 15
Bottle 240 360
case 10 15

451 Returns from customer (without Shipping)
Using movement type 451, you post customer returns without a returns delivery in Shipping into
blocked stock returns.
None
See also: 453, 651, 653
453 Transfer posting blocked stock returns to unrestricted-use stock
The quantity is transferred from blocked stock returns to unrestricted-use stock and thereby transferred
to valuated stock.
With this movement you can transfer the quantity to another storage location at the same time.
39 | P a g e
None
455 Transfer posting storage location to storage location - blocked stock returns
The quantity is transferred from blocked stock returns of the issuing storage location to blocked stock
returns of the receiving storage location.
None
457 Transfer posting blocked stock returns to quality inspection stock
The quantity is transferred from blocked stock returns to quality inspection stock and thereby
transferred to valuated stock.
None
459 Transfer posting blocked stock returns to blocked stock
The quantity is transferred from blocked stock returns to blocked stock and thereby transferred to
valuated stock.
None
AP Inventory Management Movement Type 3
501 Goods receipt without purchase order - unrestricted-use stock
This movement type is used for deliveries from vendors that are not based on a purchase order. Invoice
verification is not possible for these goods receipts.
For a goods receipt for purchase order ( 101), the receipt of returnable transport packaging can be
entered using movement type 501 and special stock indicator M.
E, K, M, Q
503 Goods receipt without purchase order - stock in quality inspection
E, K, Q
40 | P a g e
505 Goods receipt without purchase order - blocked stock
E, K, Q
511 Free-of-charge delivery from vendor
The quantity is posted to unrestricted-use stock. If there is a material with moving average price, the
moving average price is reduced accordingly.
None
521 Goods receipt without order - unrestricted-use stock
This movement type is used for deliveries from production that are not based on an order.
E, Q
523 Goods receipt without order - stock in quality inspection
E, Q
525 Goods receipt without order - blocked stock
E, Q
531 Goods receipt from by-product from the order
The goods receipt of a by-product usually refers to an order, but it can be entered without a reference.
If a component is entered with a negative quantity in the order, a reservation item is created with 531
(instead of 261). The receipt of a by-product can be entered when the component for the order is
withdrawn from stock or it can be entered as an 'other goods receipt'.
E, Q
See also: 545 and 581
541 Transfer posting unrestricted-use stock - stock of material provided to vendor
With this movement type you provide the subcontractor with the components required for subcontract
orders. The quantity is posted into unrestricted-use stock of material provided to vendor.
41 | P a g e
If there is a goods receipt for a subcontract order ( 101) consumption of components is posted from this
stock.
The transfer posting can be posted via a delivery in Shipping.
None
543 Consumption from stock of material provided to vendor
This movement cannot be entered manually.

The consumption of components for a subcontract order is posted using goods receipt for purchase
order ( 101). It can be corrected by means of a subsequent adjustment.
For special stock indicators E and Q, you must ensure that the quantity is not posted to the stock of
material provided to vendor, but to the unrestricted-use sales order or project stock.
E, O, Q
545 Goods receipt from by-product from subcontracting
If a component is entered with a negative quantity for the subcontract order, the receipt of the by-
product is posted to stock provided to vendor during goods receipt for purchase order or during the
subsequent adjustment.
For special stock indicators E and Q, you must ensure that the quantity is not posted to the stock of
material provided to vendor, but to the unrestricted-use sales order or project stock.
E, O, Q
551 Scrapping from unrestricted-use stock

E, K, O, Q, V, W
553 Scrapping from stock in quality inspection

E, K, O, Q, V, W
555 Scrapping from blocked stock

E, K, Q
557 Issue from stock in transit (adjustment posting)
Only use this movement type (also the reversal movement type) under the following circumstances:
Using movement type 557, you can correct purchase-order-independent stock in transit if
- a good receipt cannot be posted to a purchase order without stock in transit, even though there is still
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stock in transit according to the purchase order history
- stock in transit still exists, even though there are no open stock transfer orders for the particular
material
This movement type may ONLY be used in the cases mentioned above after careful analysis, to correct
stock in transit that has rounding errors.
This movement type may not be copied.
Note!
Before using this movement type, note the following:
- 392205 Analysis stock in transit / Correction if split valuation
E, Q
561 Initial entry of stock - unrestricted-use stock
During initial entry of stock balances, when the ERP system is active, you enter the physical warehouse
stock figures or the book inventory from your old system into the R/3 Materials Management
component. This data entry usually takes place by means of batch input .
E, K, M, O, Q, V, W
563 Initial entry of stock - quality inspection
E, K, O, Q, V, W
565 Initial entry of stock - blocked stock
E, K, Q
571 Goods receipt for assembly order to unrestricted-use
This movement cannot be entered in Inventory Management. It can only be entered in repetitive
manufacturing using the Goods receipt for sales order function.
E, Q
573 Goods receipt for assembly order to quality inspection
43 | P a g e
E, Q
575 Goods receipt for assembly order to blocked stock
E, Q
581 Goods receipt of a by-product from the network
The goods receipt of a by-product usually refers to a network, but can be entered without reference.
If a component is entered with a negative quantity in the network, a reservation is created with 581
(instead of 281). The receipt of a by-product can be entered during the withdrawal for the network or as
an 'other goods receipt'.
E, Q
601 Goods issue for delivery (Shipping)
In Shipping, this movement type is created automatically with the Goods issue for delivery function.
The quantity is taken from unrestricted-use stock.
E, K, Q
603 Goods issue for stock transport order (Shipping) with additional item
If you issue goods for a stock transport order in Shipping using movement type 641, you can use this
movement type to assign an extra item to the order.
The ordered material is transferred to the stock in transit of the receiving plant. The material for the
additional item is transferred from unrestricted-use stock in the issuing plant to stock in transfer in the
receiving plant.
You can also use this movement type without referencing a purchase order.
None
See also: 303, 641
605 Goods receipt for a stock transport order (Shipping) with additional item
You can use this movement type to transfer into unrestricted-use stock the material you posted into
stock in transfer in the receiving plant using movement type 603. You post the goods movement with
reference to the purchase order (if available) or the delivery.
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None
See also: 305 and 641
617 Putting together structured material (Retail) in consignment stock
The effects of movement type 617 correspond to those of movement type 317.
However, you can only use movement type 617 together with the special stock indicator K and only if
you have activated the business function Retail (EA-RET).
K
619 Splitting up structured material into components (Retail) in consignment stock.

The effects of movement type 619 correspond to those of movement type 319.
However, you can only use movement type 619 together with special stock indicator K and only if you
have activated the business eunction Retail (EA-RET).
K
621 Transfer posting unrestricted-use - returnable packaging (Shipping)
The quantity is transferred from unrestricted-use stock to the returnable packaging stock at customer.
none
623 Goods issue from returnable packaging stock at customer (Shipping)
This quantity is withdrawn from unrestricted-use returnable packaging stock at the customer.
V
631 Transfer posting unrestricted use - customer consignment stock (Shipping)
The quantity is transferred from unrestricted-use stock to consignment stock at customer .
E, Q
633 Goods issue from customer consignment (Shipping)
The quantity is withdrawn from unrestricted-use consignment stock at the customer.

W
641 Goods issue for a stock transport order (Shipping)
The quantity is transferred using a delivery in Shipping from unrestricted-use stock of the issuing plant
to stock in transit of the receiving plant.
45 | P a g e
The goods receipt for the stock transport order takes place using movement type 101 and can, if
required, refer to the purchase order or to the delivery. If a purchase order item is flagged as a returns
item in the stock transport order, you can post the goods receipt of the returns in the issuing plant with
movment type 671.
E, Q, K (Retail)
For the special stock indicators E, K, and Q, and for purchase orders with account assignment, you must
ensure that the quantity is not posted to the stock in transit of the receiving plant.
You can use the special stock indicator K only if you have activated the business function Retail (EA-
RET).
See also: 351, 643, 671
643 Goods issue for a cross-company stock transport order (Shipping)
Used only for cross-company stock transport orders with SD billing and invoice. The quantity is
withdrawn from the unrestricted-use stock of the issuing plant. No stock in transit is created. In a second
step, the goods receipt must be entered at the receiving plant. If an item is flagged as a returns item in
the stock transport order, you can post the goods receipt of the return at the issuing plant with
movment type 673.
E, K (Retail)
RET).
See also: 351, 641, 673
645 Goods issue for a cross-company stock transport order in one step (Shipping)
In contrast to movement type 643, when a goods issue is posted using movement type 645, a goods
receipt line is generated automatically ( 101). If an item is flagged as a returns item in the stock
transport order, you can simultaneously post the goods receipt of the return at the issuing plant with
movement type 675.
E, K (Retail)
RET).
See also: 675
647 Goods issue for a stock transport order in one step (Shipping)
In contrast to movement type 641, when a goods issue is posted using movement type 647, a goods
receipt line (movement type 101) is generated automatically at the receiving plant. If an item is flagged
as a returns item in the stock transport order, you can simultaneously post the goods receipt of the
return at the issuing plant with movement type 677.
46 | P a g e
E, Q, K (Retail)
RET).
See also: 677
651 Returns from customer (Shipping)
Using movement type 651, you post returns from a customer with a return delivery in Shipping to
blocked stock returns.
None
See also: 451, 453, 653
653 Returns from customer (Shipping) to unrestricted-use stock
With this movement type you post returns from the customer with returns delivery via Shipping directly
to the valuated stock.
E, Q
See also: 451, 453, 651
655 Returns from customer (Shipping) to stock in quality inspection
E, Q
See also: 451, 453, 651
657 Returns from customer (Shipping) to blocked stock
E, Q
See also: 451, 453, 651
661 Returns to vendor via Shipping
As with movement type 502, a return delivery to the vendor is entered without reference to the
purchase order, but the goods issue is posted via a delivery in Shipping.
E
671 Return for stock transport order via Shipping
47 | P a g e
If an item is marked as a returns item in a stock transport order using movement type 641, when a
goods receipt is posted against the stock transport order (movement type 101), the return is
simultaneously posted to stock in transit using the movement type 161. When the return arrives, the
issuing plant posts the goods receipt for the return using movement type 671. Movement type 671 (like
movement types 352 and 642) reduces the receiving plant's stock in transit and increases the issuing
plant's unrestricted-use stock.
E, Q, K (Retail)
You can use the special stock indicator K only if you have activated the business function Retail (EA-RET).
673 Return for cross-company stock transport order (Shipping)
If you post a goods issue for a cross-company stock transport order with a returns item using movement
type 643 via Shipping, the returns are transferred to unrestricted-use stock at the issuing plant in a
second step using movement type 673.
K (Retail)
RET).
See also: 643
675 Returns for cross-company stock transport order (Shipping) in one step
If you use movement type 645 to post a goods issue for a cross-company stock transport order with a
returns item in one step, the return is simultaneously transferred to unrestricted-use stock at the issuing
plant using
movement type 161 at the receiving plant and movement type 675 at the issuing plant.
K (Retail)
RET).
See also: 645
677 Return for stock transport order in one step (Shipping)
If you use movement type 647 to post a goods issue for a stock transport order with a return item in one
step, the return is simultaneously transferred to unrestricted-use stock at the issuing plant using
movement type 161 at the receiving plant and movement type 677 at the issuing plant.
E, Q, K (Retail)
RET).
See also: 647
48 | P a g e
6A1-6W6 Cross-System Flows of Goods
The system posts cross-system goods movements with these movement types.
The cross-system flow of goods function allows the processing of goods movements for orders and
purchase orders within a business system group that consists of multiple logical systems.
You can find more information on Cross-System Flows of Goods in the SAP Library under Logistics ->
Logistics General -> Special Processes in Logistics -> Cross-System Flows of Goods.
701 Inventory differences in unrestricted-use stock (MM-IM)
This movement is generated automatically during inventory difference posting in Inventory

Management.
E, K, M, O, Q, V, W
703 Inventory differences in quality inspection stock (MM-IM)

Management.
E, K, M, O, Q, V, W
707 Inventory differences in blocked stock (MM-IM)

Management.
E, K, M, Q
711 Inventory differences in unrestricted-use stock (LE-WM)
This movement is generated automatically when you post inventory differences in the Warehouse
Management System .
E, K, M, Q
713 Inventory differences in quality inspection stock (LE-WM)
Management System .
E, K, M, Q
715 Inventory differences in blocked stock returns (LE-WM)
49 | P a g e
Management System .
None
717 Inventory differences in blocked stock (LE-WM)
Management System .
E, K, M, Q
721 - Sales value receipt - not affecting margins (Retail)
The movement is generated automatically when the sales price of a value-only material is changed (total
sales price revaluation on the posting date).
None
731 - Sales value receipt - affecting margins (Retail)
The movement is generated automatically when the sales price of a value-only material is changed
(partial sales price revaluation on the posting date).
None
How To Create a New Material Movement Type
Explain how to create a new material movement?
T.Code : OMJJ is to define new movement types as follows:
1. Once you have carried out the activity, the system displays a dialog box for field selection.
In this, you can restrict the movement types you work with to various fields.
To copy a movement type, select the field Movement type and choose Continue.
The dialog box Define work area appears.
2. In the dialog box Define work area, enter the movement type you want to copy in the From: field.
In the To: field, enter the name of the new movement type you want to create.
To go to the overview of the selected movement types, choose Continue.
3. Select the movement type you want to copy, and choose Edit -> Copy as.
Overwrite the selected movement type with the new movement type (beginning with 9, X, Y, or Z) and
copy all dependent entries.
The system copies all control indicators from the reference movement type to the new movement type.
50 | P a g e
4. Check all views for the new movement type and, if necessary, change the control indicators. Please
note that some views have a detail screen.
5. Copy the reversal movement type and enter it in the view.

Reversal/follow-on movement types.
Explain what MIGO 543 does and how you do it?
Answer:

Movement type 543 is used in Subcontracting Process.

A short example:

You have 10 units of a raw material (ROH) and you send it to a Vendor (SAP uses Movement Type 541 to
perform this operation). Vendor will product Material B with material you have sent.

Now you do not have any units into your stock, but, you have 10 units into Special Stock (vendor).

Status at this point:

Material A = 10 (Special Stock – Vendor)
Material B = 0

Ok, then your vendor uses 10 units to product 1 Finished Product (FERT), and vendor will send you this
Finished Product (Material B).

Now you have to perform 101 Movement Type for material B (Finished Product).


Material A = 10 (Special Stock – Vendor)
Material B = 1

Ok, now you must perform 543 Movement Type for material A (Raw material) you have sent. That
means this material was consumed in order to product Material B.


Material A = 0 (Special Stock – Vendor) due 543 Movement Type
Material B = 1 due 101 Movement Type.

51 | P a g e
Here we call 543 Symbolic Return / Return token, that means Vendor is returning material you have
sent, but this material was transformed in another one.
Overview Of SAP MM Implementation Project
In every implementation project, there will be groups of SAP team members in each area where you
have a project manager with all the team leads (or at least an experience consultant) with proper
project plan.

Regarding configuration, no books will be needed (I hope all agree, what we studied in college, we just
do 1-2% of that with real business task) and can be done as per business scenarios.
1st step:
You can start with designing the SAP MM organization structure by having purchasing organization,
plants and storage locations and all assignment with plants assigned to company code.

2nd step:
This where you will be designing master data like designing material master, designing vendor master
and designing service master. For designing material master, you have new own customized material
types, material numbering, material group, account category reference and purchasing group with logic
behind material numbering.
For designing vendor master, you have new own customized vendor account group, with logic behind
material numbering.

3rd step:
You will be designing purchasing document types (PR, RFQ and PO) and its number ranges.
4th step:
You will be designing MM pricing procedure where new customize new condition types may be needed.
If CIN involved,

5th step:
You can start with designing tax procedure with designing new condition types for non-deductable and
deductable taxes with excise setting for plant and company code. If purchasing process needed
approval, then

6th step:
You can get started with designing release strategy with creating release class and release
52 | P a g e
characteristics.
7th step:
Here you can get started with inventory management control where goods receipt, goods issue and
stock transfer process, if require, you may go for new movement type creation.
8th step:
This will be the details configuration for logistic invoice verification with again where you can set your
tolerance limit.
9th step:
What will be left behind is the MM-FI automatic account determination, generally done in OBYC t.code
before activating valuation area in OX14 and activating valuation grouping code in OMWM with
assigning valuation area to valuation grouping code in OMWD t.code. Also if tax involved all tax G/L
account need to be assigned in OB40 t.code.

The above can be designed and kept ready before starting material management configuration in the
system and later as and when required you add new configuration as business needed and its true
business differs from company to company.
Reasons For Making Any Pricing Procedure in SAP
 MONDAY, JUNE 27, 2011
 ABHI

 TWEET
1. Why we are maintaining separate pricing procedure for inter company sales and business processs.
2. What is the different between standard and inter company pricing procedure and what type condition
type we are using in this intercompany.
There are two simple reasons for making any Pricing Procedure in SAP SD Modules.
1) Business Reason. What are the pricing aspects or strategies you want to apply for the client
requirement in order to sell their
goods or render services, is all about the reason for various pricing procedures.
Eg: Domestic sales pricing procedure,
- Export Pricing Procedure,
- A rebate pricing procedure or
- A High Discount oriented pricing Procedures.
- A repair pricing procedures.
53 | P a g e
You have your own conditions intended to few transactions only. Put all this conditions as a set defining
your own Procedures. It may even include special requirements and formulas applied for such Pricing
Procedures.
2) A special pricing procedures, in order to facilitate added functionalities of SAP pricing architecture, we
must define new
pricing procedure. SAP Standard programmes checks these special Indicators in-order to do some
required functions.
As a example 1, you need to have a Pricing procedure for condition supplement inorder to use the
condition supplements. The condition supplement pricing procedure must be given in the condition type
definitions (v/06) of the Pricing Condition where you need to supplement, without which SAP SD
Condtion Supplements functionality doesnt work.
As a example 2, you need to have a Pricing procedure for Inter Company Billing Conditions(IV01 & IV02)
inorder to be active for Inter Company Billing specific transactions. Thus make sure that, the procedure
wouldnot apply for non-Inter company transactions.
Eg: KA0000 for Condition Supplement for KA00
- PR0000 for Condition Supplement for PR00
- ICAA01 for Inter-Company Billing
Here I would like to remind about a important field in pricing.
In V/08 of defining a new Pricing Procedure, in main screen, you have a field called TSPP (Transaction
Specific Pricing Procedure). This has to be ticked on for Intercompany Billings.
The SAP help reads for this field as Under:
Transaction-specific pricing procedure
Pricing procedure transaction-specific indicator
Before Release 4.0A, no special pricing procedures were used for intercompany billing and rebate credit
memos, programs were just set accordingly to deal with these situations. As of Release 4.0A you are
offered greater flexibility in the form of the option to define special pricing procedures for intercompany
billing and rebate credit memos. For reasons of future compatability, you will still be able to use the old
program specifications. For this reason, you must set this indicator if you want to create a special pricing
procedure. This is to prevent the program settings being used.
This indicator is also used as of Release 4.0A to redetermine the condition class and the statistical
condition indicator when copying from a reference document.
Example:
You copy prices from a shipment document to the billing document. The prices should lead to a
surcharge in the billing document. This is guaranteed by the redetermination of the condition class in
the pricing procedure.
Same case with Standard Pricing procedure or Inter Company Pricing Procedure.
hat are the stages involved in the MM procurement cycle? i.e. the whole cycle involved in MM.
--
The typical procurement cycle for a service or material consists of the following phases:
54 | P a g e
Determination of Requirements
Materials requirements are identified either in the user departments or via materials planning and
control. (This can cover both MRP proper and the demand-based approach to inventory control. The
regular checking of stock levels of materials defined by master records, use of the order-point method,
and forecasting on the basis of past usage are important aspects of the latter.) You can enter purchase
requisitions yourself, or they can be generated automatically by the materials planning and control
system.
Source Determination
The Purchasing component helps you identify potential sources of supply based on past orders and
existing longer-term purchase agreements. This speeds up the process of creating requests for quotation
(RFQs), which can be sent to vendors electronically via SAP EDI, if desired.
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.
Purchase Order Processing
The Purchasing system adopts information 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. Vendor scheduling agreements and contracts (in the SAP System, types of
longer-term purchase agreement) are also supported.
Purchase Order Follow-Up
The system checks the reminder periods you have specified and - if necessary - automatically prints
reminders or expediters at the predefined intervals. It also provides you with an up-to-date status of all
purchase requisitions, quotations, and purchase orders.
Goods Receiving and Inventory Management
Goods Receiving personnel can confirm the receipt of goods simply by entering the Po number. By
specifying permissible tolerances, buyers can limit over- and underdeliveries of ordered goods.
Invoice Verification
The system supports the checking and matching of invoices. The accounts payable clerk is notified of
quantity and price variances because the system has access to PO and goods receipt data. This speeds
the process of auditing and clearing invoices for payment.
Notes for technical detail:
1. You will create material master (MM01)
55 | P a g e
2. You will create vendors (XK01)
3. Purchase Requisition (ME51N)
4. Request for Quotation (ME41)
5. Maintain Quotation (ME47)
6. Select best vendor and create PO (ME21N)
7. Goods Receipt (MIGO)
8. Invoice Verification (MIRO)
Meantime you can maintain Info-record for material and vendor combination (ME11)
You can also have a source list of approved vendors (ME01)
You can create contracts (ME31K)
Conventional Versus Logistic Invoice Verification
Can any one let me know the basic difference between Logistics invoice verification and normal /
conventional invoice verification?
MRHR for other goods receipts.
Logistics Invoice Verification [MIRO] was developed to take into account requirements that were
technically not possible in the conventional Invoice Verification component, such as distributing MM and
FI to separate systems.
All the functions in conventional Invoice Verification are available in Logistics Invoice Verification. If
required, you can use conventional Invoice Verification and Logistics Invoice Verification alongside each
other.
The following functions in conventional Invoice Verification are not possible in Logistics Invoice
Verification:
1. Verification of invoices with no reference in the system to a purchase order or a goods receipt.
2. Posting directly to a G/L account, asset or material
3. Changing the account assignment in the purchase order
4. Simulation of documents
Some new functions are only possible in Logistics Invoice Verification :

1. Unlimited multiple selection
2. Manual invoice reduction
3. Automatic invoice reduction
4. Invoice verification in the background
56 | P a g e
5. Verification of invoices with installment conditions.
6. Posting across company codes.
Two more things to note :-

1. Even though LIV can do posting across company codes it cannot do this if there is a variance.
2. LIV cannot operate when the PO is for a 'one time vendor'. These one time vendor purchase
orders can only be matched using conventional invoice verification.
Finally, Points 1 and 2 are possible in LIV but you need to change the configuration to allow posting
direct to GL account.
Please refer to :-

IMG : Material Management -> Logistics Invoice Verification -> Incoming Invoice ->
Activate Direct posting to G/L Accounts and material Accounts
Important Accounts for Invoice Verification
When you post an invoice, the system selects the accounts to be posted. Account assignment is based
partly on your entries when you create an invoice and partly on information stored in the system.
Your entries provide the following information:

- Is the invoice posted as a net or as a gross amount?
- Which vendor account must be posted?
- Which G/L accounts must be posted?
- Which amounts must be posted?
The material master record provides the following information:

- Which valuation class does the material belong to?
- What type of price control is the material subject to?
- Which account must be posted for the material?
- Is the stock available smaller than the quantity invoiced?
Posted documents provide the following information:

- What is the purchase order price?
- Has there been a goods receipt for the purchase order?
- To post invoices correctly, your system administrator must define the accounts in the chart of accounts
and the actions to be taken for the different postings when the SAP system is being installed in your
company.
The SAP accounts are defined in a chart of accounts. The following accounts are particularly important
for Invoice Verification:
Vendor Accounts
There is a separate account in the sub-ledger for each vendor that all amounts concerning this vendor
57 | P a g e
are posted to . Making a posting to the vendor account is not the same as making a payment; payment is
only made when the Financial Accounting department posts the vendor's payment to a bank account.
Stock Accounts
In the R/3 System, you do not set up a separate account for each material. Instead, different materials
with similar features are grouped together in a common account (for example, raw materials: acids). The
account relevant for a material is defined in the material master record when a material is created. The
system only posts to the stock account when a price difference occurs for an invoice.
GR/IR Clearing Accounts

The GR/IR clearing account is an "intermediate" account between the stock account and the vendor
account. At goods receipt, the net invoice amount expected is posted to the stock account. The
offsetting entry is posted to the GR/IR clearing account. This posting is then cleared by an offsetting
entry on the vendor account at invoice receipt.
Tax Accounts
The system makes postings to special tax accounts when invoices include tax.
Price Differences Accounts

Price differences have to be posted to a price difference s account if price differences have occurred in
an invoice and when invoices are posted net and no posting can be made to the stock account.
Cash Discount Clearing Account

When you post an invoice net, the cash discount amount is taken into account in the invoice, it reduces
the value of the items; the offsetting posting is made to the cash discount clearing account, which is
then cleared when payment is made.
Freight Clearing Account

The stock account is debited with the planned delivery costs at goods receipt and the system makes the
offsetting posting to a freight clearing account. This posting is then cleared by an offsetting entry to the
vendor account at invoice receipt.
No tax information during consignment Settlement
Finance will received this SAP Error Message when they tried to do a consignment settlement without
the relevant consignment vendor info record:
No tax information found
Message no. M8 732
Diagnosis
For the system to settle withdrawals, the tax information has to be available. No tax information could,
however, be found. This can have one of the following reasons:
58 | P a g e
Plant XX has no purchasing organization assigned to it.
Plant XX has more than one purchasing organization assigned to it, but no standard organization.
For vendor 0000099099 and material ABCDEFGHIJK in plant ZZ and purchasing organization ALL, no tax
code has been entered in the consignment/ pipeline information record.
System Response
The system is unable to settle withdrawals.
Procedure
Check the plant-to-purchasing-organization assignments in Customizing and make any necessary
changes.
Plant -> Purchasing organisation
Plant -> Standard purchasing organization
Check the relevant purchasing information record and maintain the tax code if missing. Settle the
withdrawals again
To be able to settle any consignment withdrawals, an info records have to be created by the purchaser.
In MRKO where the error message is display, click the material documents. In the material documents,
click the Partner tabstrips and you will be able to see the consignment vendor code.
Check ME13 to ensure that the consignment info record for the vendor have been created.
If it have not been created, the user have to input it with transaction ME11.
Could you also please, check the following:

1. Check the consignment info record is active in tr: OMEV.
2. A consignment info record exist with the control indicator entered there (tax code).
3. Determine the purchasing organization to read the info record.

- Determination via the plant of the withdrawal (TA: OX17): several purchasing organizations can result
from this.
- If no purchasing organization can be found, you cannot settle the withdrawal.
- If exactly one purchasing organization is found, this organization is used to determine the info record.
- If several purchasing organizations are determined, the info record is determined with the standard
purchasing organization
The cause might lie with the selection criteria in tr MRKO.

If only company code and plant are entered, the system lists all the pending consignment liabilites
between the vendor and the plant.
If there exist more than one info records between the vendor and the the plant and one of the info
records contains no tax code, the system issues error message M8 732 'No tax information found' to
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every line item including the one with tax code maintained in the info record.
But if you enter the consignment material or material document you need to settle on the selection
screen, the system
will settle the vendor consignment liabilites successfully provided that tax code is maintained in the info
record. It is the system logic.
Hope above information can help you to clarify this issue.
SAP Notes Reference:

140675 - Consignment: Determination of tax code transition
350450 - MRKO: List display
139792 - MRKO:Tax indicat via consignmt info rec. as of 4.0
SAP MM - Consignment Process - Settlement
I am having a problem with consignment settlement.
While trying to settle the consignment in MRKO, I am getting the following error message:
Consignmnt settlement: No message was found for partner 123/company code 1000.
Is there any message indicator which needs to be turned on?

You can goto tcode MRM1, specify the condition type = "KONS" for consignment and Company code =
1000
Remember not to specify the partner in the condition record.
Then proceed to MRKO to do your consignment settlement.

I did what you suggested and now I am able to settle the consignment.
I am able to see the invoice document that is created.
Thanks once again for the help!
Use of Invoice Plan in SAP
What is significance of invoice plan and how do we configure in R/3?
Through the use of Invoicing Plan for leasing agreements and such like, you aims to considerably reduce
the manual data entry effort in the purchasing and invoice verification (A/P) department.
The invoicing plan enables you to schedule the desired dates for the creation of invoices relating to the
planned procurement of materials or services independently of the actual receipt of the goods or actual
performance of the services. It lists the dates on which you wish to create and then pay the invoices.
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You can have the system create the invoices automatically on the basis of the data in the purchase
order, thereby triggering payment of the vendor. It is also possible to enter the invoice for an invoicing
plan manually. It is recommended that the invoice shall be created via Logistics Invoice Verification --->
Automatic Settlement --->Invoicing Plan Settlement. This
transaction can also run in the background.
Following are necessary customizings and preconditions for using the Invoicing Plan functionality in SAP
-
1) You must maintain the settings in Customizing for purchasing (for example, invoicing plan type, date
categories, date descriptions, and date sequence proposals). The related path is IMG ---> Material
Management ---> Purchasing ---> Purchase Order ---> Invoicing Plan ......
2) The Purchasing document with FO Document Type (Framework Order) must be used. This document
type requires that a validity period be entered in the PO header. This specification is adopted in the
invoicing plan, provided that this has been predefined in Customizing for the relevant invoicing plan
type.
3) The purchase order item must have an account assignment.
4) The Logistics Invoice Verification must be used.
5) The vendor must have agreed to use the automatic invoice creation facility (since we will use
automatic settlement to create the invoice). In this case, the 'AutoEvalGRSetmtDel.' indicator must be
flagged in the vendor master record.
Furthermore, once Purchase Order is created with order type FO, ensure that the indicators for GR/IR
control have been set correctly on the item detail screen. The Goods Receipt indicator may only be set in
combination with the Goods Receipt Non-Valuated indicator. The Invoice indicator must be set. For the
automatic creation of invoices, the ERS (Evaluated Receipt Settlement) indicator must be also set. A
further prerequisite for automatic settlement is that a tax code must be entered in the purchase order.
Steps for MM Pricing Procedures
Can anyone please help me on the Pricing Procedures?

I have read it many times but fail to understand.
Pricing Procedure :
In MM module, pricing procedure is used during RFQ and PO creation. Total value of material based on
all addition and subtraction like discount, surcharge, tax, freight, etc. In this we are defining pricing
procedure and linking to vendor and purchase department through the virtual schemas.
Following steps for pricing procedure as,

1. Define conditions.
2. Define pricing procedure.
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3. Define virtual purchase organization and vendor.
4. Info Record.
Customization for Pricing Procedure :

1. Definition of Conditions :
/NMEK0---condition type…condition types--- definition (define for basic price, net price, discount,
surcharge, tax etc.)
2. Defining pricing procedure :

/NMEK0--- calculation schema---calculation schemas—New entries (Define procedure and put the
conditions like formula so that final price will be net price / total value as per company requirement)
3. Linking pricing procedure to independent condition types.

/NMEK0---condition type…condition types--- definition for position for defined conditions (Enter the
defined pricing procedure in the each independent conditions “Pricing Procedure” box)
4. Defining Schema group for Vendor :

/NMEK0--- calculation schema---schema groups—vendor—New Entries.
5. Defining Schema group for Purchase Organization--- New entries.

/NMEK0--- calculation schema--- schema groups---- purchasing organization--- new entries.
6. Linking Virtual Purchase Organization to actual Purchase Organization.

/NMEK0--- calculation schema--- schema groups----- Assign P.Org. (in actual P.Org, enter virtual P.Org)
7. Linking Pricing procedure to virtual P.Org and virtual vendor :

/NMEK0--- calculation schema--- Determine Schema--- -Standard --- New entries (Enter virtual schema
and P.Org. along with pricing procedure)
8. Linking virtual vendor to actual vendor-- /NXK02 then enter schema group vendor in Purchasing
Data )
9. Info Records (/NME11)---- click on “Purch. Org. data1” and enter condition types and pricing
procedure
Anand
What are the steps in pricing determination in MM? Condition, Access sequence and schema.
In the SAP MM Pricing is more important. Just yesterday I have completed the Pricing as I am doing the
SAPMM now. I can give some light on this Topic, not 100%. After 2 days definitely some more I can
share.
The Basic thing is Condition Technique. In which there are

1. Access Sequence 2. Condition Record 3. Condition Type 4. Condition Table.
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A Access Sequence access a Condition Record of a Condition Type in a Condition Table is a Condition
Technique.This is a simple logic
Here the Condition Type is very important like PB00, PBXX,RA01 etc.
In the background every Condition Type has its own defition means the purpose of the Condition Type
like, is it for Pricing or Percentage, Quntity base, Accrual Feilds etc is to be defined to work this
functions.
Normally we use the existing ones without any risk. But some cases, we have to Create a New Condition
Types as per the organisation requirement.
The Pricing Schema is useful to minimise condition types while mention prices for Vendor on the basis of
Pricing Schema which we defined according to organisation requirement.
The Pricing Schema means the calculations procedure of Condition Type.
Ex. RA01 - Discoount % is caclulated on PB00 - Gross Price means

RA01 is based on PB00 like that we have to define in the Pricing Schema
which makes easy to use in realtime.
Here PB00 has the Access Sequence - 0002.
But RA01 does not have the Access Sequence.Why because it is a dependent on PB00. But both are
Condition Types.
In the system, by default some standard Scheme will be there at Vendor Schema Group in the Vendor
Master Screen means the standard one is assigned which is very lengthy which may fullfil our
requirement. But some cases which may not fullfil our requirement, in such we have to define.
For the configuration, I may not able to explain properly through here but will give some Idea.
Configuration: SPRO-IMG-Material Management- Purchasing- Conditions-Define Price Deternmination

Process
1. Define Access Sequence
2. Define Condition Type
3. Defince Calculation Schema:- Here you have to define the Schema
Define Schema group
1. Define Schema Group vendor
2. Define Pricing Schema group
3. Schema group for Purchase Organisation
4. Assign Schema group to Purchase Organisation
Define Schema determination

1.define calculation schema for Standard purchase organisation
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After completion of the Schema Group, we have to assign it to Vendors.
Then whenever we use any transaction with this Vendor, the concerned Schema will work as configured
by us.
I think this will help you. Actually the Pricing is a vast. Becuase each Condition have its own importance
and each Access Sequence have its own importance. So you need not bother about this. First you learn
how to define the Calculation Schema through the above.
Here we can create many Calculation Schemas which can assign one schema to Local vendors
another schema to out side vendor one more schema to foreign vendors like that we can classify.
SAP Purchasing Configuration Tips and Tricks
Goods Receipts/Invoice Receipts for Purchase Order
Transaction OMW1 allows you to set whether the Price Control is a mandatory "S" or "V".
V indicate that you want the system to value the stocks with the latest price.
S indicate that you want the system to value the stocks with a fixed price method.
Price Control V - Moving Average Price
Assume Material Master current price is 10
Goods Receipts for Purchase Order - Movement Type 101
Material Document Posting created - inventory increases
Accounting Document Posting created
Debit 12345 Inventory 12
Credit 67890 GR/IR 12
New Moving Average Price = ( GR value + Total value ) / ( GR quantity + Total stock )
Invoice Recipts for Purchase Order - MR01
Debit 67890 GR/IR 12
Credit 45678 Vendor 15
New Moving Average Price = ( Inventory difference of 2 + Total value ) / ( Total Stock)
Price Control S - Standard Price
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Material and Accounting Document is the same.
The one with the lower value will be posted with a price variance entry.
Goods Receipts for Purchase Order - Movement Type 101
Material Document Posting created - inventory increases
Debit 23456 Price Variance 2
Credit 67890 GR/IR 12
No change in Standard Price
Invoice Recipts for Purchase Order - MR01
Debit 67890 GR/IR 12
Debit 23456 Price Variance 3
Credit 45678 Vendor 15
No change in Standard Price
General Ledger Account Configuration

Transaction OMWB - Automatic posting for inventory
Inventory posting BSX
Goods receipt/inv.receipt clearing acct WRX
Cost (price) differences PRD
Transaction XK03 - Account Payable Vendor Master
Tick Accounting info. and hit the Enter key
Field name Reconcil.acct 45678
Vendor Returns Without PO Reference
You can used Return Purchase Order, transaction code ME21N
At the item details, look for the Return columns and tick it.
MIGO_GR - Goods Receipt for Return Purchase Order

Movement type will be 161 to deduct the stock and 162 for reversal.
During Goods Receipt for Return Purchase Order, you do not have to change the movement type from
101 to 161 as the system will automatically assign the movement type to 161 upon saving the postings.
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However, before saving, check if there is a tick in the Return Column to ensure that it is a return
Purchase Order.
Create a new Purchase Order Number range to differentiate

OMH6 - Define Number Ranges
Create a new Purchase Order Type to differentiate e.g ZB

OMEC - Define Document Type
Changing the PO Layout sets

OMFE - Messages: Output Programs
/: IF &EKKO-BSART& = 'ZB'.

/ RETURNED PURCHASE ORDER
: ELSE.
/ PURCHASE ORDER
/: ENDIF.
Purchasing List for Open Purchase Order, Goods Receipt, Invoices
Open Purchase Order = Open Goods Receipts ( Selection parameters WE101)
This two parameters determined what information is shown:
selection parameter
scope-of-list parameter
The configuation transaction code is OMEM

You can define additonal selection parameter for your users as well as untick those fields which you
does not want it to be printed.
Your can have the Purchasing Documents by :-
ME2L - Vendor
ME2M - Material
ML93 - Service
ME2K - Account Assignment
ME2C - Material Group
ME2B - Requirement Tracking Number
ME2N - Purchase Order Number
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ME2W - Supplying Plant
Force buyers to create Purchase Order with ref. to a Pur. Req., Quotation or Pur. Ord.
Transaction OMET
Create a new entry, give it a name and tick :-
Ref. to PReq
Ref. to P.O.
Ref. to quotation
Next, you've got to associate via SU01
Click Parameters, insert a new parameter id EFB to the authorization code.
Type in Parameters value you want e.g. XX
You have to assign the control for ALL the SAP buyers via thier SAP users id.
Logoff and login again. Then try to create a Purchase Order without a reference.
Define default values for buyers
Transaction OMFI
Double click on the default values you want to change.
Save it.
Next, you've got to associate via SU01
Click Parameters, insert a new parameter id EVO to the authorization code.
Type in Parameters value you want e.g. 01
You have to assign the control for ALL the SAP buyers via thier SAP users id.
Logoff and login again. Then try to create a Purchase Order and check the default values.
In the Fast Processing button :-
you can choose whether to adopt automatically all the line items fields in the Purchaes Requisitions
Puchase Order Condition
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Suppose you want to calculate the GST and DISCOUNT for a Net Value of 1000.
Net value 1000
GST 10% of 1000 100
DISCOUNT 10% of 1000 100
Final Net value 900
This is what you do :-
M/08 - Define calculation schema
First check the conditions column Steps e.g. PB00 and PBXX belongs to step 1.
Next check the last Steps after Actual Price
Now, look at the column Fro To
If you want the DISCOUNT to be calculated based on 1000, put the Steps number in the column Fro
The Fro To controls the calculation.
Information Structure
In the SAP standard info structure S012 is updated by the Purchase Order creation date, not the Goods
Receipt date. e.g. a Purchase Order is created in January and good receipt is in February and March,
S012 will shows the values in period January.
Transaction MC26
Info structure S012 Update group (stats) SAP
Double click on Goods received qty
In the section Date field for period determination
Purchase Order Layout Sets, Message Types
Create a new message types for a different layout of Purchase Order
M/34 - Maintain message types
Click the Partner definition button
Insert the new message type to the Partner
OMQN - Fined-tuned Message Control
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Add a new Printer Operation 1 - New 2 - Change
OMFE - Layout sets for Purchase Order
Attach the new message type to the new layout sets
M/36 - Maintain message detemination schema : Purchase Order
OMQS - Assign schema to Purchase Order
OMGF - Assign Output devices to Purchasing Groups
MN05 - Assign default Message Type to Purchasing Groups
User Defaults for Purchase Order
There are some fields which you can set as defaults for the buyer in transaction ME21.
Transaction SU01
Input the user name and click Parameters
PID Parameter value

LIF - Vendor number
BES - Purchase Order Number
BSA - Order type
EKG - Purchasing group
EKO - Purchasing organization
WRK - Plant
LAG - Storage location
MKL - Material group
WAK - Promotion
PO Release Strategy
4.6x
The release code is a two-character ID allowing a person to release (clear, or approve) a requisition or an
external purchasing document. The release codes is basically controlled via a system of authorizations
(authorization object M_EINK_FRG).
Use SE12, structure CEKKO to check all the fields available for controlling the Purchase Order.
e.g. If the total value for the Purchase Order exceeds 10,000, release strategy 01 is assigned to the
Purchase Order. There is only one characteristic created in this example. For controlling the Purchase
Order type, create characteristic for CEKKO-BSTYP and the value NB.
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CT04 - Create Characteristic e.g. NETVALUE
Click Additional data Table name CEKKO Field name GNETW and press enter

(for currency dependent field, you are prompt to enter the currency which the system then converts the
currency of the Purchasing document into this currency)
In the Basic data (X refers to tick),

X Mutliple values
X Interval values
In the Value data, in the Char. value column, type >10000 and press enter
Save your data
CL02 - Class
Class - Create REL_PUR
Class type - 032
Click Create
Description - Release Procedure for Purchase Order
In the Same Classification section, click Check with error
In the Char. (characteristic) tab, type NETVALUE to assign your characteristics to the class
OMGS - Define Release Procedure for Purchase Order Type
Release Group - New entries

Rel.group Rel. Object Class Description
02 REL_PUR Rel. Strategy for PO
Release codes - New entries

Grp Code
02 01
Release indicators
Release indicators Release Description
0 Blocked
1 X Release
Release Strategy
Release group 02
Rel.strategy 01
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Release codes 01
Release status 0
1
Classification Choose your check values
OMGSCK - Check Release Strategies

(make sure there are no error messages)
Once the Purchase Order is not release, buyers will not be able to print the Purchase Order.
Goods Receipts will be shown with Message no. ME 390 - Purchasing document XXXXXXX not yet
released.
In 4.6c, Purchase Order with Release Strategy have a tabs at the end of the Header. This allowed the
buyers to check the release status of the Purchase Order.
The person with the release authorization have to use ME28 to release the Purchase Order.
Prompt the last Purchase Order Price for the Material
If you want the system to take the price from the last Purchase Order, then do not maintain the
conditions in the info record because it has precedence over the last PO. This means that the netprice
field in the info record should be left blank.
In the case when you have already maintained the conditions in the info record (or netprice), try to
delete them or make them invalid by changing the validity date.
Even though no price was maintained, the info record will still keep track of the Order price history.
To check the Order price history, go into the material info record and click Environment -> Order price
history
Adopt Purchase Order Header Text
To default the Header Text into the Purchase Order
Step 1 :- Maintain text in Vendor Master
MK02 - Change Vendor
Choose Extras -> Texts - Input the text in Purchasing memo
Step 2 :- Link Text types to Header text in Purchase Order
OMFV - Define rules for copying (adoption of) text
Choose Header Text
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Choose Goto -> Linkage: text types -> To vendor
Filled in the field No. (e.g. 01 - Header Text), next tick whether you want the text to be adopted or
for displayed only
Choose Update to save
Create a new Purchase Order Document Type
4.6x
If you have more than one company code, you might want to define a new document type and number
range to differentiate between the two company.
Define a new number range not in used

OMH6 - Number Ranges for Purchasing Documents
Copy the NB - Standard PO to e.g. ZB

OMEC - Define Document types
Maintain :
Text for Document Header/Item
Text for Document Supplement
OMF6 - Messages Header Texts
Send Purchase Order via Output Determination
Read note 191470 - Purchase order as an e-mail
From release 4.5, you can send your purchase order via output determination. This note have indicate
all the requirement and settings necessary to send purchase order via the output determination once
your SAP have been connected to an External Mail System.
Send Purchase Order with Microsoft Outlook
This is how it work:-
First you send the text converted Purchase Order to your SAPoffice
Sample ABAP program for sending mail to your SAPoffice
Then from Microsoft Outlook, you can send it out externally to your Vendor
Install the SAP setup program on the SAP Presentation CD-ROM under \GUI\WINDOWS\WIN32
Execute the SAPsetup program and choose the Desktop Interfaces.
Then choose the SAP MAPI Service Provider (select Change Options to display the selection)
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Once the SAP MAPI is installed. You can create your logon profile for SAPoffice.
Go into your Control Panel of your windows.
Select the Mail option from the Control Panel to call the MAPI profile manager.
Choose Add to call up the new logon profile setup wizard
Select Add from the Services and select the SAP MAPI Service Provider
Type in the required R/3 information (client, sap user name, password)
The supplied PST file is sapwrk.pst
Now, logon to your Microsoft Outlook and see whether you can access all your SAPoffice folders.
If you send the file using SP01 -> System -> List -> Send, the file will have the extension ALI. Use the
Windows Explorer to default open with the Windows Notepad.
Sending mail directly from SAP via Microsoft Exchange
If you want to send your mail directly via Microsoft Exchange, you have to install the SAP Exchange
Connector Software on your Microsoft Exchange Server.
The setup program SETUP.EXE is located on the R/3 Presentation CD in the directory
:\GUI\WINDOWS\WIN32\SXC.
Then you have to setup :-
SM59 - The RFC destination
SCOT - SAPconnect
SAP MM - What is Request for Quotation
1) What is RFQ??
2) What way it helps Industry??
3) How can it be linked to PR?
4) Relevant Transaction codes??
1) RFQ - Request for Quotation.
It is the initial step in a vendor selection process. The business sends out RFQ to the vendors and the
vendors respond back with Quotations with prices. Next step is quotation evaluation followed by issue
of a purchase order for the material/services needed.
Sometimes in certain business processes - A purchase requisition for new material services starts the
process of RFQ.
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Before creating purchasing documents you should ensure that a master record exists in SAP for both the
vendor and delivery address. T/Code ME41 Create an RFQ.
Before creating an RFQ, you should consider the following:
Vendors: Do you have a list of suitable vendors for the RFQ? The vendor numbers must be available.
Deadlines: What are the important deadlines for bidding, if any (for example, the deadline for
submission of quotations)?
Number assignment: If your company uses external number assignment, then you need an RFQ number
that falls within the valid number range.
Collective number: We recommend that you assign the RFQ a collective number. You enter this number
once, and the system copies it for each RFQ you create within a competitive bidding process. The
collective number enables you to track all RFQs for a given competitive bidding process. The number can
be alphanumeric and up to 10 characters long. You enter it in the header data of the RFQ.
2) This process will help for Industries to choose right Vendor with compare the prices from all
quotations received as a result of a competitive bidding process using the price comparison list . The
comparison list ranks the quotations by item from lowest to highest price.
3) You can create an RFQ from a requisition automatically. To do so, you must earmark requisitions for
RFQ processing.
4) Relevant transactions:
ME41 SAPMM06E Create Request For Quotation
ME42 SAPMM06E Change Request For Quotation
ME43 SAPMM06E Display Request For Quotation
ME44 SAPMM06E Maintain RFQ Supplement
ME45 RM06EF00 Release RFQ
ME47 SAPMM06E Create Quotation
ME48 SAPMM06E Display Quotation
ME49 RM06EPS0 Price Comparison List
No Multiple Account Assignment for PO
No Multiple Account Assignment for Blanket PO
As of release 4.6x, SAP does not allow multiple account assignment for blanket Purchase Order on the
same Purchase Order line. (Item Category - B - Blanket item)
To get around the constraints, users could enter a second line item and assign a different account
assignment.
Things might get messy if the person doing the releases selects the wrong line item
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or
if the Goods Receipts was received under the wrong line item.
This becomes a training issue, but it can be done.
Multiple Account Assignment In Purchase Order
I've found something about multiple account assingment. If i have multiple assignment i can't have
valued receipt, but if i desable the flag i have no message.
-
When you are having the multiple account assignment, then the system will force you to have GR-non
valuated indicator being flagged which results in the fact there is not any FI document at GR posting
stage and this is the standard feature of SAP.

Can I set a material to force to enable GR indicator and force to disable GR indicator?
-
No, not at all. The disability of GR indicator can be set in OME9 with account assignment category.
We have an unusual situation relative to accounts payable invoice entry.
Our users create a requisition and subsequent PO (using requisition release strategies) with a single
account assignment category. They cannot use multiple account assignment category distribution
because they cannot have non-valuated goods receipts. They purchase services, primarily.
There are multiple occasions when the invoice for the service arrives that they need to change the
account assignment to include either multiple objects within an account assignment category or
distribute the costs among multiple account assignment categories, as in one or more cost centers and
one or more internal orders. They wish to do this all on the same line item at goods receipt or invoice
entry, rather than modifying the purchase order.
-
It’s not possible to do this at goods receipt as the screen layout for goods receipt to PO cannot be
modified. There is account assignment distribution on the invoice entry screen (MIRO), but the purchase
order cannot be referenced in that case.
Has anyone encountered this requirement and, if so, how was it handled?
-
There are two preconditions that must be fulfilled -
1) Go to transaction OME9 and flag on the 'IR changeability' indicator of the account assignment
category 'K' (since this is for services).
2) When maintaining your PO, make sure that the GR-non-valuated indicator is flagged.
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When GR is posted, no accounting document will be generated. This accounting document will be
created during IR posting where A/P can manually modify the accounting data as their wish.
Is there a way to configure in MM where PO line items can have multiple account assignments and still
create accounting entries when posted during Goods Receipt in MB01? Currently, I can't assign multiple
accounting entries to PO line item unless indicated as GR non-valuated. If GR non-valuated, no
accounting entries will be created during Goods Receipt, entries will be created only during IV.
--
In fact, it is possible to maintain multiple account assignment for each and every PO line item by
selecting the 'Multiple Account Assignment' button in the 'Account Assignment' View of the Item Detail
of PO. However, for such multiple account assignment selection, no accounting document will be
generated upon GR maintenance. This can only be done during IR via LIV process.
From the accounting point of view, for one particular single line item, it is possible to split into different
cost centers or internal orders. For instance, I have ordered 10 pcs of bearings of which 4 will be charged
to Cost Center A and the remaining 6 pcs will be posted to cost center B. However, it is of SAP standard
feature that once using the multiple-account assignment, no accounting document will be generated
after GR posting. They will only be posted when IR is maintained.
Explain About The PO Confirmation Control Key In Detail
ERP SAP ==> SAP Material Managment
Purchase Order Item Confirmations Tabstrips:
The confirmation control key controls the process subsequent to the creation of the PO.
E.g. For some important materials with long delivery times, you wish to receive advance information (via
the shipping notification or inbound delivery) about the expected GR date so that you can include this
information in the availability check.
The confirmation functionality is used to get better visibility & control over the goods receipts. Due to
this requirement, when you work with confirmations, the system will not propose any quantity for MIGO
unless any confirmations are entered in the PO. Also, MIGO will propose only such quantity for which
the confirmation is entered.
In the purchase order, there is a field confirmation control key, following is its function extracted from
text book.
1.The confirmation control key governs whether confirmations are expected for specific purchase order
items and whether these confirmations are relevant for goods receipt or materials planning.
2. If a material document is to be created when the goods receipt posting for the inbound delivery is
carried out, then the goods receipt assignment must be defined in the confirmation control.
How to set this field?
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Configuration path:
SPRO -> MM -> Purchasing -> Confirmations -> Set up confirmation control or tcode OMGZ
Explain is there a necessity to fill the confirmation control, order acknowledgement & confirmation
requirement. In STO normally we input the data for normal P.O.'s.only. If we input the above said data
what happens if not what happens.
Confirmation gives the details of the shipping data, acknowledgement, delivery details etc......Overall
view..
If it is used then Inbound delivery has to be created else GR is not possible...
VL31N--Inbound PO wrt PO/STO.(manual)..
If idoc /edi are configure, then everything will be automatic.
Confirmation Control is configured in SPRO -> Materials Management -> Purchasing -> Confirmations ->
Setup Confirmation Control. The Confirmation Control should be assigned to the Vendor in Purchasing
View (MK01/MK02). This it gets copied into the PO.
How to change the confirmation key in PO?
I have to change the confirmation key (in me23N) in the confirmation tab. It is working fine if there is no
partial GR (entry in delivery schedule tab) against that line item. But if there is a GR entry against that
line item its giving me a message 'confirmation key should not be changed'.
This is the standard of SAP....once GR is existing for the line then you can't change the confirmation key.
To change, reverse the GR and change the key then Post GR again.
or
You can short close the PO line which you already have GR and create new line with remaining qty and
enter new confirmation key.
1. What is meant by a client in the SAP R/3 System?
A: Commercial and organizational unit with in R/3, with its own data, master records and set of tables.
Cliet forms a Corporate group.
2. What is the mySAP.com Marketplace and the Workplace?
A: Where you can get the SAP Products, Services, Pre Configured systems and Industry specific
Configurable documents.
3. Name the essential organizational elements in Materials Management and explain how they are used.
A: Company code, Plant, Storage location, Purchase organization and Purchase groups.
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Company codePlantsStorage locations.
Purchase GrpPurchase OrgCompany codes and plants.
4. Explain the concept of views in the material master record.
A: Maintains each department's data under an organizational level.
5. What do you have to take into account with regard to the function or transaction to be chosen if you
want to create a view (that is, data for a particular user department) in the material master for different
organizational units (for example, for different plants)?
A: Create Material master MM01
6. What importance does the purchasing organization have for the material master?
7. How do you control the use of selected valuation classes per material type?
A: In IMG configuration maintain Account category references for each material type and maintain
possible valuation classes under this ACR.
8. With which master data is the account group used?
A: Vendor Master Data
9. What does an account group determine?
10. At what level is general data for vendors (such as the address) managed? What user department is
responsible?
11. What is meant by a one-time vendor (sundries account)?
12. What views have to be maintained in the vendor master to be able to create purchase orders?
13. What determines whether a material can be posted to stock?
Purchasing / Optimization / Customzing ...
1. Explain the basic structure of purchasing documents! What is the special feature of purchase
requisitions?
A: Header ,Item, Item detail.
2. Which control parameters are located at the item level of purchasing documents?
A: Material data, Qty/Weights,Delivery schedule, Acceptance period, Delivery invoice, Conditions, Texts,
Delivery Address, confirmations, confirmation control.
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3. What does the account assignment category U (unknown) stand for? When can you use this
account assignment category?
4. How can you assign different delivery dates to a purchase order item?
A: In item details, there is a tab called Delivery schedule. In that you fill in the required dates.
5. Why may this be advisable?
A: To inform the vendor, when the material is required. May have an extended answer.
6. What must you take into account or determine in the case of multiple account assignment?
7. Explain the procurement process using outline purchase agreements. What are the basic
differences between a contract and a scheduling agreement?
8. What is the purpose of the collective number for RFQs?
A: To monitor all the RFQs that belongs to a single requirement.
9. With which functionality can you compare quotations submitted by different vendors?
A: Quotation comparision in ME49.
10. At which organizational levels is info record data kept?
A: Plant.
11. What determines whether you can change the "GR", "GR non-valuated", and "IR" indicators in the
purchase order?
12. At which level is the purchase order history kept?
13. In which of the following cases can you define scales for the condition type?
Purchase order
Contract
Info record
Vendor
Quotation
Scheduling agreement
14. Which master data must you maintain for a quota arrangement?
A: In MMR Quota arrangement usage indicator in MRP2 View, which contains quota percentaages.
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15. At which levels can you define a source list requirement?
A: Plant Level.
16. Specify the priorities in the source determination process!
A: Contracts, Scheduling Agreements, Consignments, Stock transfer and transfer posting. In which ways
can a source be assigned to a purchase requisition?
A: There is a Assign source of supply in item details screen.
18. What is the main purpose of the "Assign requisitions" function?
19. What are the preconditions for automatically generated delivery schedule lines?
A: Source list should be maintainted with MRP indicator material relevant for MRP and Scheduling line
generated automatically - 2.
20. How do you determine that the "source assignment" flag is set on the initial screen when a
purchase requisition is created?
21. Explain the advantages of external services procurement (item category "D") in comparison with
procuring services by means of a standard purchase order with account assignment (text or material
type DIEN)!
22. How do you make it possible to accept external services that are not covered by a purchase order
or exceed the scope of services covered by a purchase order?
23. What does the release strategy determine?
A: Conditions required for the approval of the documents.
24. At which level are purchase requisitions released? What does this depend on?
A: Only at item level, determined by Release without classification, at header level determined by
release with classification.
Inventory Management (incl. Special Procurement) / Physical Inventory
1. What is the difference between blocked stock and GR blocked stock?
A: Blocked stock is the stock moved to un-used stock for a specific reason.Where as GR blocked stock is
the stock received directly against a purchase doc is blcoked for quality reasons or requirements.
2. According to the bill of material, a production order requires 10 pieces of a material. But only 8
pieces are requested for the issue date and the remaining 2 pieces are no longer needed, because they
are already available from previous orders. What are the implications of this? What needs to be done?
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3. In which cases are reservations appropriate for goods receipts?
4. What options do you have to carry out goods movements between different plants within your
group?
A: TP from Plant to Plant ( one step and two step), TP from Plant to Plant (Crosss company), STO.
5. You have posted the wrong quantity at GR. How do you rectify this?
A: Do a reversal proecess, or Cancel the material document, i think later is not possible.
6. Can you use different movement types in one material document?
A: Yes in case of Sub-contracting process its possible about other cases dont know.
7. How are goods movements documented in MM?
A: In material documents.
8. How are goods issues that are posted by sales and distribution (SD) documented?
A: I think Material Document.
9. What are the effects of a goods receipt?
A: Update in PO history, Material Doc, FI accounting document, Inventory update, G/L accounts posting,
GR/IR slip, PO item set to zero if delivey completed indicator is set. Statistical data update in inventory
control, updatation of vendor evaluation data in purchasing, Inspection lots created in QM.
10. When is the u201Cdelivery completedu201D indicator automatically set at GR?
A: When Goods received qty equals the ordered qty.
11. For which levels do you define that negative stocks are allowed?
A: I Think at Storage location level.
12. Briefly explain the process of consignment!
A: Consignment info record, Create PO with item category K, Do GR 101, TP 411. MRKO for consignment
settlement.
Customizing incl. Message Determination
1. What does the item category determine?
2. Can you define further item categories?
3. What does the document type determine with regard to purchasing documents?
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4. Which parameter is used to differentiate between the output (as messages) of a newly created or
changed purchase order and a reminder or urging letter (expediter) relating to the PO?
5. How can you ensure that the choice of the printer to be used for printing out purchasing
documents depends on the purchasing group?
Materials Planning
1. On what information are the various consumption-based planning procedures based? Name the
consumption-based planning procedures.
2. Name the 3 planning run types
3. What information is recorded in the planning file?
4. What determines whether a material is to be included in the total planning run?
5. Which times does the system take into account when scheduling for external procurement and
where are they entered?
6. How many receipt elements are created and which quantities are procured if a requirement of 160
pieces exists, 10 pieces are available and the following conditions exist:
a) lot-for-lot order quantity:
b) fixed lot size 100:
c) lot-for-lot order quantity with rounding value 100:
d) lot-for-lot order quantity with minimum lot size 50:
e) lot-for-lot order quantity with minimum lot size 200:
f) lot-for-lot order quantity with maximum lot size 100:
g) replenishment up to maximum stock level 500:
Account Determination/Valuation
1. On which levels can you valuate materials?
2. What is the function of the period closing program?
3. You want to carry out a posting for a goods movement that was carried out 3 months ago, but has
not yet been posted. Which posting date do you use?
4. What is the purpose of the account grouping code?
5. Can you assign more than one valuation class to a single material master record?
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6. What is a valuation class? How is it used?
7. What is the purpose of the (general) account grouping code?
8. Under which circumstances is a posting made to a difference account when a goods receipt for a
purchase order is posted to stock?
9. Are accounting documents usually created for the following postings?
Transfer posting from material to material
Material type ROH, GR for PO posted to stock
Material type UNBW, GR for PO to stock
Transfer posting from plant to plant in one step
Transfer posting from plant to plant in two steps: removal from stock
Transfer posting from plant to plant in two steps: putaway
GR for PO with account assignment, GR not valuated
GR for PO with account assignment, GR valuated
GI of a raw material (ROH)
GI of an non-valuated material (UNBW)
Invoice Verification (incl. Customizing)
1. In which cases would the stock or consumption account be credited with the cash discount
amount?
2. When does a price variance not lead to an invoice being blocked?
3. If, in an invoice, an item for $ 100 is blocked, and 2 further items for a total of $ 200 are not
blocked, how much is the vendor paid in the next payment run (without tax)?
4. Why is the message issued by the system about a payment block not an error message?
5. What is a stochastic block?
6. An invoice is entered before the goods receipt is posted and is blocked due to quantity variance.
The goods receipt is then entered for the quantity invoiced, invalidating the blocking reason. How does
the system react?
7. Which options do you have for releasing an invoice manually?
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8. Can invoices be blocked manually?
9. How do you enter a credit memo that results in the quantity invoiced being changed?
10. Which system-side requirements must be fulfilled before you can use evaluated receipt settlement
(ERS)?
11. When do price and quantity variances occur during the ERS run?
SAP MM Interview Questions and Answers
Questions
What is the difference between the stock transfer between two plants belonging to same company code
and those belonging to different company code?
What are the important fields in purchasing view?
What are the steps in automatic account assignment configuration?
How do you create movement types? What are the steps involved? When will you recommend a new
movement type?
What is meant by access sequence? When it is used?
How does the PO pick up the pricing schema?
What are the steps involved in creating a pricing procedure?
What are the types of info records?
What is meant by consignment stock?
What are the steps involved in consignment cycle?
Tell me about the subcontracting cycle.
How is scrap accounted in subcontracting?
How are the byproducts taken care of in subcontracting?
Tell me about the various movement types and usage.
What is meant by scales? Can scales be used in standard purchase order?
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What is the difference between a contract and a scheduling agreement?
How does the system calculate taxes?
How does the system calculate nondeductible taxes?
What is meant by batches? How can the batches be searched?
How is a shelf-life item managed in SAP? What is the full cycle?
What are the settings required for quota arrangement?
What is meant by MRP Type and lot sizing?
Can it be configured in such a way that the external requisitions can also be taken into account while
MRP runs in consumption-based planning if VB is selected as MRP type?
Explain the concept of split valuation and when can it be used? What are the settings required?
What are valuation area, valuation category and valuation class?
What is meant by a credit memo?
How are free items managed in a PO?
What is meant by a release strategy?
What are release groups and release codes?
What are the differences between release procedure with classification and release procedure without
classification? When are they used?
Is it possible to have a release procedure without classification for a PO?
Is it possible to have scales in a quotation?
What is GR blocked stock? When it can be used?
What is the movement type for return to vendor? How to reverse it?
How are the variations in subcontracting taken care of in SAP?
What are the tools available for data migration in SAP?
What is the difference between LSMW and CATT?
How to give specifications for developments?
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How do you plan for a vendor rating system and move about?
What is RTP?
What is the movement type used in receipt of RTP?
How is an item with serial no. managed?
How do you make variants?
What are the types of tables in SAP?
How to inventory excise duty in SAP?
What are the documents generated in the MIGO 101 movement type? What are the accounts hit?
What is the difference between lot and batch?
What are the business benefits achieved by maintaining Source list and info record ?
How source determination works ?
Answers
A stock transfer from plant to plant generally takes place within a company code. It can, however, also
take place between two company codes, if the plants are assigned to different valuation areas, which
belong to different company codes.
Unlike a stock transfer from storage location to storage location, a stock transfer from plant to plant
affects both accounting and Materials Planning, as follows:
Accounting:Accounting is affected if both plants are assigned to different valuation areas. This means
that a stock transfer leads not only to a quantity update but also to a value update (stock value, G/L
accounts). Thus, parallel to the material document for stock transfer, an accounting document is
created.
Materials Planning:Materials planning are affected because a change of plant stock is taken into account
by Materials Planning
RFQ/Quotation
Purchase requisition
Purchase order
Master data (Info record, Source list, Conditions, Vendors etc.)
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Outline agreements
Material type is assigned to A/c Cat Ref.; A/c Cat. Ref is assigned to Val. Class; Val. class assigned to G/L
A/c.
Configuration:
OMWM : Activate Val. grouping Code
OMSK : Create A/c cat. ref and Val. Class; then A/c cat ref assigned to material type.
OMWD : Val. area (plant) assigned to Val. grp. code (0001)
OBYC : Assign Val. modifier (0001), New Val. Class and G/L A/c
Now create new material and assign new val. class in Accounting 1 data screen. Then create PO, GR.
Transaction code is OMJJ
You can copy new movement type which is near-by old one.
When we go to new movement type, if there is no possibility to done transaction with old movement
type.
Steps: 1) entry control data 2) short text 3) allowed transactions 4)help text 5)up date control data
6)account grouping 7)reasons for movement
Condition type has an access sequence assigned to it which determines which tables to access for data
and in what sequence. This has a sequence of table based on the most specific to most generic.
It can be used for any new condition type creation.
The pricing procedure assigned to a vendor has a calculation schema attached to it. This schema defines
the various conditions pre-requisite, calculation & sequence in the PO. Generally, only one type of
pricing procedure is followed for all the vendors.
To create a pricing procedure, the steps will be
Create Condition tables
Create access sequence by placing the different condition tables from most specific to the most general.
Create the condition types
Assign the Access sequence to the condition type
Create the pricing procedure
Place the all condition types in a sequential order as per the business requirement and pricing needs.
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Consignment stock - vendor
Components provided to vendor
Project stock
Consignment stock customer
Pipeline material
Orders on hand
Standard
Pipeline
Consignment
Subcontracting
Consignment stock is the material which is lying in the premises but is not owned by the company. It has
no value assigned to it until it is taken into own stock. Once it is used in production or to be sold, it is
taken into own stock.
Consignment cycle is similar to a standard purchase cycle. The difference it that no accounting
document is created at the time of goods receipts only qty is updated.It is settled once the same is
utilized.
When the material is sent for subcontracting i.e. some value addition, it is converted into a different
material. It needs a BOM to define the components of the finished item being received.
When the material is sent for subcontracting i.e. some value addition, it is converted into a different
material. It needs a BOM to define the components of the finished item being received.The scrap or the
process loss can be adjusted while doing a quality inspection of the material received after
subcontracting.
products can be taken care of by defining them in the BOM.
101 GR in unrest. Use
103 GR in Blocked stock
105 Release from Block to Unrest. Use stock.
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122 Return to vendor from unrest. Use stock.
124 Return to vendor from blocked stock
301 Plant to Plant transfer.
309 Material to Material transfer
311 Transfer from stg loc to stg loc
261 Issue for consumption
411 Taking consignment stock into own stock
551 Withdrawal for scrapping
By using scales we can fix the price of a material accordingly, for example, we can fix the material price.
Based on the quantity like
For quantity 1 to 100 price is Rs1000
For quantity 101 to 200 price is 900
Like that, you can fix price.
A scheduling agreement can be made for Consignment, Subcontracting & stock transfer. A contract, also
known as a blanket PO, can be made for standard items and can be restricted to a Value or Qty.
Based on the calculation schema of that condition & based on access sequence assigned to it.
Condition type in the standard system: Non-deductible input tax = NAVS
Depending on the tax code in the PO item and the tax calculation schema, the system calculates the
non-deductible tax portion and inserts it in the condition type with the category N.
The condition type has the calculation rule "absolute amount".
Normally, the access sequence that regulates tax code determination is assigned to the condition type.
Batch is a subdivision of your stock of a material having the same characteristics
ex: medicines,food products
We can search batches using the standard search facility (match code, key F4) based on the naming
convention of the batches or, if you use batch classification, based on the characteristics of the batches.
There are actually two types of shelf life
Total shelf life
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Minimum remaining shelf life
Total Shelf life - If total shelf life is maintained then the minimum shelf life will also to be entered
mandatory.
While taking GR for such item, it actually asks the user to enter the manufactured date so that the
system automatically calculates the expiry date.
Minimum shelf life - While taking the GR, it asks the user to enter the date of GR date so that it checks
whether the days entered in material master has been satisfied. If the condition is not satisfied then it
will not allow to take receipt for that item.
To set up a quota arrangement for the procurement of a material, proceed as follows:
Master data -> Quota arrangement -> Maintain, enter the material and plant number,
Press ENTER
It display the overview screen for the quota arrangement periods, Enter a validity period for quota
arrangement, Enter date until which the quota arrangement is valid. The start date is calculated by the
system.
Press ENTER
Select the quota arrangement and choose, Goto -> Item overview to display the item overview screen of
the quota arrangement. Enter a quota arrangement item for each source of supply you want to include
in the quota arrangement.
You must enter the following data.
Procurement type
Special procurement type, Enter k in the S column, for example, if a consignment arrangement for the
material exists with the vendor.
Vendor number
Procurement plant,(supplying plant)
Quota column, enter the quota assigned to each item
Press ENTER
The percentage distribution of the quotas is calculated and displayed automatically by the system.
Save the quota arrangement. The system assigns a number to the quota arrangement item
automatically.
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It is procedure that you set in the system on how the Material is planned
Reorder Point
Seasonal requirement
Replenishment
Vendor Managed
Forecast Based
Master production Scheduling
Lot size:
You can define your requirements (to be produced or Procured) in terms of Weekly, Monthly, Qty
based, Maximum Replenishment.
Yes you can do it based on the MRP2 tab for material master you need to give you MRP type as VB and
in Mrp2 set automatic reorder point tab. Now run MD02 and MD04.
It is reference for all the other existing Purchase Orgnizations.It is not assigned to either to plant or
comp code. The contracts, terms and conditions can be utilized by other Purchase Organizations.
When the same material to be valuated differently then we can go for split valuation. Often we use split
valuation in chemical industries related to chemicals.
For example, color, ph, quality.
We need to define valuation categories and valuation types.
For valuation category: origin, valuation types are local procurement and foreign procurement
For valuation category: procurement types, valuation types are in-house procurement and external
procurement.
For valuation category: quality, valuation types are poor quality, medium quality, high quality.
like this we can define valuation categories and valuation types.
CUSTOMIZATION SETTINGS
MM-> VALUATION AND ACCOUNT ASSIGNMENT -> SPLIT VALUATION.
Define valuation categories and valuation types.
Assign valuation types to valuation category.
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Assign plants in which valuation is effecting.
Once customization settings are done.
Create material master and fill account cat reference in accounting view.
Again for same material type give valuation types which u taken and give the moving avg price.
NEXT STEP
Create ME21N Purchase order
MIGO
Once taken to MIGO check MMBE -Stock overview and MB02- Accounting views.
Valuation area is generally company or plantValuation category -split valuation is applicable or not.
Valuation class- whether the materials fall in to which category for simplification such as raw materials,
semi finished goods like that.
Credit memo is as similar as money back to your account.
For Ex. If you did excess payments (the difference between PO price and Account Transfer price) to the
vendor than the actual payment or under some circumstances vendor is returning some amount to your
account, for this you need to maintain one account type, that account type is called credit memo. This
may be just to identify why and from where the money has been posted in your account.
If this is not maintained, at the valuation level conflicts in payment differences may arise.
When you create purchase order for vendor at that time show in line item data in which one check box
available for free delivery. So when you want to create purchase order with free quantity click on that
check box.
Release strategy means, value of the purchase order is more than certain limit, that can be released by
MM manager. That movement type is ME29N.
Release code is a two character ID allowing a person to release a requisition or an external purchasing
document. Release group is a group of release codes which can release a purchasing document for a
release strategy.
Release procedures with classification can be used for both internal and external purchasing documents,
whereas release procedures without classification can be used only for internal documents.
No, release procedure without classification not possible for external documents like PO.
With classification will allow release at header and Item.
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Without classification will allow release item -wise only.
For a PO you will want a release header wise and not item wise. Hence you need to use with
classification.
For PR you can use anyone of them i.e., with or without classification.
Possible in case of time dependent conditions.
When we have some issues in the received stock and we do not want the quantity to be considered in
the inventory then we can maintain the stock as GR Blocked stock.
It is only recorded in the purchase order history. This stock is NOT valuated.
You can display goods receipt blocked stock from two viewpoints:
Goods receipt blocked stock for a material (at plant level)
Goods receipt blocked stock for a purchase order item
Movement Type 161 is used for return to vendor. Just select return button in the PO.
Subsequent adjustment can be Processes through T-Code - MIGO
LSMW - Legacy System Migration Workbench (Used to upload the data from Non SAP to SAP System)
CATT - Computer Aided Test Tool (Used to Create test cases as well as upload data)
LSMW is uesd to migration of data from non-sap system to the sap system or sap system to sap system,
here the data is migrated from the one system to another system. so this is a migration tool
Whereas CATT is a computer aided testing tool, used to test the abap object
In SAP for any kind of development, function consultant need to give the functional specification stating
the purpose of the developlement as well as logic for the selection, related fields and tables. He also
needs to prepare one or two test cases to test output the report/development.
Based on Price, Quality, Delivery and Service.You can give points to this categories and you can maintain
TCode:ME61
Returnable transport packaging (RTP) is a multi-trip packaging medium (for example, pallets or
containers) in which goods can be transported more than once between vendors and customers.
Returnable transport packaging from a vendor that is stored at a location on 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 customer's valuated stock.
The movement type used in the receipt of RTP is (501 M)
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Serial Number:If you want to distinguish each Item (generally unit of measure will be EA, PC.. etc) in the
inventory, then serial number will be used.Separate serial number profile need to be created and placed
at work scheduling view or plant data storage view of material master.
Advantage:we can track the movements of each serial number of material.
Configuration settings
You have to configure the serial number profile & assign it to Material master. In the configuration
profile of serial number, you have to check the check box for serial number required for processing & set
the Goods movement transaction where you want to automatically create the serial number or create
the serial number for the material using Tcode IQ01.
During Serial Number profile in Serializing Procedure you have to maintain the following settings:
MMSL - Maintain goods receipt and issue doc. 03 02
SDLS - Maintain delivery 03 02
SDRE - Maintain returns delivery 03 02
In Serialization profile, there is a checkbox for (Existing required) uncheck that check box & then test
your transaction. You will get a button "Create new in serial number" in selection screen during goods
receipts...Create new serial number for material there & then make goods receipt.
Assign Serial Number to existing stocks
IQ02 - Edit - Special Serial Number Functions
Change to - From Stock
Stock Type - '01'
Plant - 'XXXX'
Storage Location 'XXXX'
Save
Edit - Special Serial Number Functions
Change back - To Stock
Go to any reports
Select save variant (Ctrl+F10)
Create the layout as you want then save the variant in your name.
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There are only 3 types of table in SAP.
Transparent Table
Cluster Table
Pool Table
At the time of Goods Receipt (TCode MIGO) capture Excise duty in Excise tab. This is part 1 capture.
TCode J1IEX, Part 2, Post Excise duty
The Documents that are generated are: Material Document & Accounting Document.
Accounts that are hit are:
RawMAterial/Stock /Operations Acct (Depends on the Type of Business) - Debit
GR/IR Clearing Acct -Credit
Inspection Lot:In the Quality Management (QM) component, you process quality inspections on the
basis of inspection lots . If you want to inspect a specific quantity of a material or a piece of equipment,
an inspection lot must be created in the system. The documentation describes how inspection lots are
created automatically or manually and how you use the inspection lots to process different types of
inspections. Once an inspection lot has been created, you can inspect the goods, record the inspection
results or defects, and complete the inspection with a usage decision.
Batch:Certain materials' features cannot always be guaranteed to be exactly alike in production. For
example, you cannot guarantee that a certain color will always have the same shade. Minor differences
between production lots cannot be avoided. You need to be able to uniquely identify the individual
production lots of the same material and manage them separately in inventory.
Materials that require such precise identification, for example pharmaceutical products, are identified
and managed in stock not only according to material number, but also according to batch number.
With batch handling, you can manage not only production lots from in-house production, but also
production lots from vendors as separate entities.
Sourcelist:It is a combination of one material with more than one vendor or plants(in internal)and
sourcelist is the higher priority than inforecord.you can stratify the vendor for a material with sourcelist.
Eg:you have 4 info records for a same material with different vendors. If you are not maintained
sourcelist, check while creating PR.It will display all vendors. If you have sourcelist there you have
selected a vendor as fixed. You will only get one vendor,please check.
Info record:Is a combination of one material with one vendor
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Source determination: if you activate this indicator, you give vendor during PR creation .otherwise you
can give the vendor at the time of PO. you can save the PR without vendor. source determination is used
to identify the source of supply.
SAP Inventory - Allow Negative stocks
In order to use negative stocks, you have to allow negative stock in customizing.
Only those materials for which negative stocks is activated in the material master, will be allowed to
have negative stocks.
Customizing: transaction OMJ1 - Allowing Negative Stocks.
First level: Valuation area.
Choose for which valuation area you want to allow negative stocks and activate the flag.
Select the line of that valuation area and go to the plant level.
Second level: Plant.
When only one plant exists for that valuation area (this will always be the case in case the valuation area
is defined as a plant), you see immediately a details screen with special stocks.
Choose the special stocks that may go negative. Next use F3 or the green arrow to return to the
overview of the plants. Select the plant and go the the storage location level.
Third level: Storage Locations.
Select for which storage locations negative stock is allowed.
Save the whole lot.
Negative stock will now be allowed in the selected storage locations for all materials that have the
negative stock indicator activated in the material master in the storage 2 view.

Likely topics for MM interview:

1. Functionality of different purchase organization like standard Purchase Organization, PO etc.

2. Pricing procedure, condition types and its fields, access series etc.

3. Automatic account determination. & all MM movements.

4. Consumption based planning.

5. Total CIN.
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6. Important business process like subcontracting process with CIN, STOs, Vendor consignments etc.

These are some of the topics but it depends on requirement of your interviewers and his clients
requirements.

Possible interview questions and answers:


Special Stocks available - Sale Order Stock / project Stock / Subcontractor Stock.

What are the types of info records?

Type of info records are Standard, Pipeline, Consignment and Subcontracting.

Tell me about the subcontracting cycle.

Subcontracting Cycle - You define procurement type for the material procured from subcontracting as "F
30".
External procurement from subcontractor - BOM is defined for the material. Then you place PO with
item category L on the S/C & you transfer the material to S/C in transaction MB1B mvmt type 541 &
prepare S/C official receipt of payment for excisable material sent to S/C transaction J1IF01. Send
material to S/C. After processing receive material in transaction MIGO. Refer the S/C official receipt of
payment in MIGO. Reconcile the official receipt of payment & material doc in trans J1IFQ & complete
the official receipt of payment in transaction J1IF13.

How are free items managed in a PO?
For free items you have to tick free item check box which is at item level. After ticking this box you will
able to manage free items in purchase order.


It is reference for all the other existing Purchase Organization.

It is not assigned to either to plant or company code.
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The contracts, terms and conditions can be utilized by other Purchasing Org.

What is GR blocked stock? When it can be used?

GR blocked stock- If you wish to accept goods from a vendor conditionally (because a certificate is
missing), you initially post the goods to the goods receipt blocked stock.

What are the important fields in purchasing view?
Order Unit, Purchasing group, material group, Plant sp. Material status, Auto. PO, batch Management,
Purchasing value key, GR processing time, Post to inspection stock, critical part, source list, JIT shed.
Indicator, MPN. These are all important field we use in purchasing depending on material type and
mainly depends on company business process.
SAP MM Support Problem Solution
Is it possible to maintain the same material master with same code in all plants in a company. Our client
is using same materials in all their four plants?
Material numbers are always maintained at Company code level. If you look at the Material master data,
some data is maintained at Company code level, some at Plant level and some at Storage location level.
If you have all the 4 plants attached to one company code, they should have the same material number.
What you need to do is to extend the material to all the 4 plants if thats your requirement. Also, if you
have your valuation area as your Plant, then you have the flexibility to maintain Plant specific pricing for
the same material.
You can use MM01 T code to copy material from old plant to new plant. But check for the required
details in your new plant and make changes accordingly. *-- Yogendra Wagh
Where we do the configuration for the cost centre allocation, because whenever we GR a material,
accounting document is created for that particular material. How that particular material go in to the
particular accounting (G/L account)
In Tcode: OBYC -- Automatic Postings.

for Inventory Posting Trns Key is: BSX
for Off setting entries like Goods issue, initial stock......Trans Key is : GBB
Based on the Movement types, Valuation class it will be assigned to a G/L account.
You can refer the configuration in Tcode: OBYC
Could any one can explain complete configuration of pricing procedure & application.
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The Basic thing is Condition Technique. In which there are
1. Access Sequence 2. Condition Record 3. Condition Type 4. Condition Table.
A Access Sequence access a Condition Record of a Condition Type in a Condition Table is a Condition
Technique.This is a simple logic
Here the Condition Type is very important like PB00, PBXX,RA01 etc.
In the background every Condition Type has its own defition means the purpose of the Condition Type
like, is it for Pricing or Percentage, Quntity base, Accrual Feilds etc is to be defined to work this
functions. Normally we use the existing ones without any risk. But some cases, we have to Create a New
Condition Types as per the organisation requirement.
The Pricing Schema is useful to minimise condition types while mention prices for Vendor on the basis of
Pricing Schema which we defined according to organisation requirement.
The Pricing Schema means the calculations procedure of Condition Type.
Ex. RA01 - Discoount % is caclulated on PB00 - Gross Price means

RA01 is based on PB00 like that we have to define in the Pricing Schema
which makes easy to use in real time.
Here PB00 has the Access Sequence - 0002.
But RA01 does not have the Access Sequence.Why because it is a dependent on PB00. But both are
Condition Types.
In the system, by default some standard Scheme will be there at Vendor Schema Group in the Vendor
Master Screen means the standard one is assigned which is very lengthy which may fullfil our
requirement. But some cases which may not fullfil our requirement, in such we have to define.
For the configuration, I may not able to explain properly through here but will give some idea.
Configuration: SPRO - IMG - Material Management - Purchasing - Conditions - Define Price

Deternmination Process:
1. Define Access Sequence
2. Define Condition Type
3. Defince Calculation Schema:- Here you have to define the Schema - Define Schema group
1. Define Schema Group vendor
2. Define Pricing Schema group
3. Schema group for Purchase Organisation
4. Assign Schema group to Purchase Organisation - Define Schema determination
1.define calculation schema for Standard purchase organisation
After completion of the Schema Group, we have to assign it to Vendors.

Then whenever we use any transaction with this Vendor, the concerned Schema will work as configured
by us.
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The Pricing in MM is vast because each Condition have its own importance and each Access Sequence
have its own importance. So you need not bother about this. First you learn how to define the
Calculation Schema through the above.
What are the initial and basic steps in MM Configuration?

What is the sequence in MM Configuration?

Before MM Configuration, you must understand the process and what is your client requirement.

Configuration is only 10-15 % time of the total time during implementation.

Generally in implementation in MM side, you may look into:

1. Define Plant

2. Define Storage Location

3. Assign Plant to a company

4. Define Purchase Organization

5. Purchase organization assignment

6. Designing of material master

6.1 Defining material master field selection

6.2. Material Master Plant specific field selection
Material Master Type

6.3. Define number range for material type

6.4. Define Industry sector for material master

7. Designing of Vendor master

8. Defining Purchasing Group

9. Defining of material group

10. Define Document type for PO, PR, RFQ

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11. Release procedure for PO, PR, RFQ

12. Configuring Pricing Procedure

But all depends on the client requirement and their business process.
In ME23N what is the difference between PO Quantity and Scheduled Quantity?
Ans:
PO Quantity which is known as committed quantity by vendor to supply as and when on or before
specific delivery date.
Scheduled Quantity is the quantity to be delivered by the vendor in respect of schedule line as planned.
The total PO quantity can be dragged and partially divided into different segment of delivery date for
different quantum of material .This quantity is referred to by GR and IV for checking purposes also.

When do we need a new document type in purchase order?
Ans:
1) Suppose you want a separate report for import PO and domestic Po in t-code like ME2N, ME2L. In
that case we have to define new Po document type so we can get report by document type and same
will applicable to Asset purchasing also.
2) You want different pricing procedure assignment in MM, then in that case PO document will help like
import and domestic pricing procedure.
3) Suppose in service PO user may forget to use item categories D or he may used different item
categorizes other than D, so in that case we can define new document type and allow only item
categories D so he cannot use the wrong item categories in PO.

How many Po type are there?
Ans:
In purchasing document types are divided in two types:
a) Internal purchasing document
Example: purchase requisition
b) External purchasing document
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Example: quotation, purchase order, contract, schedule agreement.

At which level is the purchase order history kept?

How can we access ( see ) it?
Ans:
PO history is updated in table: EKBE and if you go to see, there is a field client and purchasing
document/plant.
PO history updation depends upon transaction and event type where there are different type of
transaction key:
1 Goods Receipt
2 Invoice Receipt
3 Subseq. Debit/Credit
4 Down Payment
5 Payment
6 Goods Issue for Stock Transfer
7 Consumption (Subcontracting)
8 Delivery (Stock Transfer)
9 Service Entry Sheet
A Down Payment Request
C Down Payment Clearing
Q Comparison for Internally Posted Material (Only IS-OIL)
R Return Delivery via Delivery Note
P Invoice Parking
V Down Payment Request Clearing

You can see that PO history is updated at PO line item level and also see it at the header level then in
status tab, you can see the the following gets updated

- Ordered
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- Delivered
- Still to delivered
- Invoiced
- Down paymts

Where is the purchase order text stored?
Ans:
It is stored in the tables STXH, STXL. Text gets stored as object ID and text ID.

How to edit created P.O.? If user want to change some data like price, data etc. in a created purchase
order but system is not allowing it. As a support SAP MM functional consultant what you would do?
Ans:
This is an open question without direct answers and you should suggest the possibilities:
If you have made goods receipt against PO, then you cannot make any change to the price and other
condition details in PO if not you will be able to do it.
Also, check whether user have authorisation for ME22N.
The Price came from Inforecord (if you have maintained the inforecord for material and vendor
combination), then in this case you cannot directly change the Price in PO. If you want to change then
check PO condition type is it PBXX, then you can change.
There is a procedure called as the field selection. When a purchase order is created, then it requires a
release. In the release procedure you can maintain the fields which cannot be changed as per the field
selection. For example, if I am an approver and I approved a purchase order for 10 pieces and released
it, in this case if the changes are allowed for the quantity then the total release procedure becomes
useless.
All transaction are stored in table TSTC.

Transaction for MM module start with M.
IH09 - Display Material

MM01 - Create Material
MM02 - Change Material
MM03 - Display Material
MM50 - List Extendable Materials
MMBE - Stock Overview
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MMI1 - Create Operating Supplies
MMN1 - Create Non-Stock Material
MMS1 - Create Service
MMU1 - Create Non-Valuated Material
ME51N - Create Purchase Requisition

ME52N - Change Purchase Requisition
ME53N - Display Purchase Requisition
ME5A - Purchase Requisitions: List Display
ME5J - Purchase Requisitions for Project
ME5K - Requisitions by Account Assignment
MELB - Purch. Transactions by Tracking No.
ME56 - Assign Source to Purch. Requisition

ME57 - Assign and Process Requisitions
ME58 - Ordering: Assigned Requisitions
ME59 - Automatic Generation of POs
ME54 - Release Purchase Requisition

ME55 - Collective Release of Purchase Reqs.
ME5F - Release Reminder: Purch. Requisition
MB21 - Create Reservation

MB22 - Change Reservation
MB23 - Display Reservation
MB24 - Reservations by Material
MB25 - Reservations by Account Assignment
MB1C - Other Goods Receipts

MB90 - Output Processing for Mat. Documents
MB21 - Create Reservation

MB22 - Change Reservation
MB23 - Display Reservation
MB24 - Reservations by Material
MB25 - Reservations by Account Assignment
MBRL - Return Delivery per Mat. Document
MB1C - Other Goods Receipts

MB90 - Output Processing for Mat. Documents
MB1B - Transfer Posting
MIBC - ABC Analysis for Cycle Counting
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MI01 - Create Physical Inventory Document
MI02 - Change Physical Inventory Document
MI03 - Display Physical Inventory Document
MI31 - Batch Input: Create Phys. Inv. Doc.
MI32 - Batch Input: Block Material
MI33 - Batch Input: Freeze Book Inv.Balance
MICN - Btch Inpt:Ph.Inv.Docs.for Cycle Ctng
MIK1 - Batch Input: Ph.Inv.Doc.Vendor Cons.
MIQ1 - Batch Input: PhInvDoc. Project Stock
MI21 - Print physical inventory document
MI04 - Enter Inventory Count with Document

MI05 - Change Inventory Count
MI06 - Display Inventory Count
MI09 - Enter Inventory Count w/o Document
MI34 - Batch Input: Enter Count
MI35 - Batch Input: Post Zero Stock Balance
MI38 - Batch Input: Count and Differences
MI39 - Batch Input: Document and Count
MI40 - Batch Input: Doc., Count and Diff.
MI08 - Create List of Differences with Doc.

MI10 - Create List of Differences w/o Doc.
MI20 - Print List of Differences
MI11 - Physical Inventory Document Recount
MI07 - Process List of Differences

MI37 - Batch Input: Post Differences
CT01 - Create Characteristic

CT02 - Change Characteristic
CT03 - Display Characteristic
CL01 - Create Class

CL02 - Classes
CL03 - Display Class
CL04 - Delete Class
CL2B - Class Types
How to create the new Material Master Unit of Measurement?
The Path (to create UOM) is as follows:
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SPRO--->General Settings--->Check Units of Measurements
in Check units of measurements you need to define Dimension, ISO Code, Units of measurement.
1. What transaction key is used to post a valuated goods receipt for purchase order items not subject to
account assignment?
a BSX
b WRX
c PRD
d KDM
e BSV
2. What is value string WA01 defined for?

a Goods receipt of standard and subcontracting purchase order items without account assignment
concerning valuated material into stock.
b Deliveries without charge
c Goods issues
d Other goods receipts
3. Which value string is defined for Goods receipt of standard and subcontracting purchase order items
without account assignment concerning valuated material into stock?
a WE01
b WA14
c WA01
4. Which valuation string is used for Delivery without charge for material subject to standard price
control, with posting date in the previous period and the standard price in the posting period is different
to the standard price in the current period?
a WE01
b WA14
c WA01
5. What is the key for account determination that enables a G/L account assignment differentiation for
the offsetting entry for an inventory posting?
a Valuation grouping code
b Chart of accounts
c Account grouping
d Valuation class
6. For which transaction key in materials Management in the standard system is account grouping
active?
a BSX
b WRX
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c PRD
d GBB
7. For which transactions can you change the account grouping?

a Invoice verification
b Inventory Management.
8. The rules that you use to define if the configuration of automatic posting for a posting transaction
depends on which of the influencing factors?
a Valuation Group code
b Material/material type
c Account grouping
d Chart of accounts
e Valuation class
9. From where do the transaction keys for delivery cost postings come?
a Purchasing calculation schema
b Value string
10. What does the system use for the account assignment category to determine the default account?
a Transaction key PRD
b Transaction key GBB
c Valuation group code
d Account grouping
e Valuation class
11. What are the characteristics of a Document type for Accounting documents?
a Two character alphanumeric code
b One number range per document
c Cannot assign authorization group
d Determines whether net posting is determined for the documents.
e Account types that may be used with the document type may be selected when entering documents.
12. What are the features of number assignment for accounting documents from MM?
a Configured for each company code
b Always linked to the fiscal year
c Numbers assigned without gaps
d Defines whether number assignment is external or internal
e The interval from which the number is assigned.
13. The rules that you use to define if the configuration of automatic posting for a posting transaction
depends on which of the influencing factors?
a Valuation Group code
b Material/material type
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c Account grouping
d Chart of accounts
e Valuation class
14. From where do the transaction keys for delivery cost postings come?
a Purchasing calculation schema
b Value string
15. What does the system use for the account assignment category to determine the default account?
a Transaction key PRD
b Transaction key GBB
c Valuation group code
d Account grouping
e Valuation class
16. What are the characteristics of a Document type for Accounting documents?
a Two character alphanumeric code
b One number range per document
c Cannot assign authorization group
d Determines whether net posting is determined for the documents.
e Account types that may be used with the document type may be selected when entering documents.
17. What are the features of number assignment for accounting documents from MM?
a Configured for each company code
b Always linked to the fiscal year
c Numbers assigned without gaps
d Defines whether number assignment is external or internal
e The interval from which the number is assigned.
1. a
2. c, d
3. a
4. b
5. c
6. d
7. b
8. a, c,e
9. a
10. b, d
11. a, b, d, e
12. a, c, d, e
13. a, c, e
14. a
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15. b, c
16. a, b, d, e
17. a, c, d, e
Which of the following stock types can be counted through Physical Inventory procedure?
(more than one answer can be correct)
A Unrestricted use stock.

B Block stock.
C Quality Inspection stock.
D Vendor consignment stock.
E In-transit stock.
Answer - A,B,C,D
Which of the following can possibly influence the valuation price of a moving average priced material?
A Goods receipt for a purchase order.

B Goods Issue to a cost centre.
C Invoice verification against a purchase order.
D Stock transfer between two storage locations in the same plant.
E Transfer posting from unrestricted use stock to quality inspection.
Answer - A,C
In the SAP system a user can operate in the following hierarchies.

A Service level.
B Application level.
C Main menu level.
D Month.
E Total stock value.
Answer - D, E
Your planning department is using a Forecast Model for materials planning. It has been established that
while demand for the particular material is projected to increase steadily as market share is increased,
the fluctuating tourist demand will affect the overall requirements. Which forecast model will best
address this requirement?
(Only one answer is correct)
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A The Constant model.
B The Constant trend model.
C The Seasonal trend model.
D The Fluctuating trend model.
E The Seasonal model.
Answer - C
In the SAP system, the reference document used in the purchasing cycle is the:
(Only one answer is correct)
A Purchase requisition.
B Info record.
C Source list.
D Purchase Order.
E None of the above.
Answer - D
True / False
What purpose does invoice verification serve in materials management?
a It allows invoice that do not originate in materials procurement to be processed.

b Completes the materials procurement process
c Handles the payment
d Allows credit memos to be processed
e Handles the analyses of invoices.
Answer - B
What are the tasks of invoice verification?
a Entering invoices and credit memos received.

b Checking the accuracy of invoices
c Executing the account posting resulting from invoice
d Updating open items and material prices
e Checking invoices that were blocked.
Answer - A,B,C,E
What is the process of invoice verification?
a Purchase order, service or GR referenced for incoming invoice.

b Invoice items suggested by the system against referenced document
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c Corresponding automatic account postings carried out.
d Payment proposal list for vendor generated.
Answer - A
From where does the system pick the default quantity of an item when you post invoice receipt?
a Invoice
b Purchase order
c Purchase order history
d System settings
e Vendor master
Answer - C
During invoice verification the system picks the rate at which tax is calculated from the vendor master
record.
TRUE
FALSE
What Is The DataFlow Of MM?
The dataflow as functional process below are the points:
1) Purchasing Requsition -> sent by inventory dept to purcharsing dept

2) Request for Quotation(RFQ)-> Purchasing Dept shall ask the vendors to give the quotation for the
requested materials by inventory.
3) Quotation -> Quotation is sent by vendors to the company
4) Purchase order-> Based on all paramers of a quotation sent by vendors. Vendors are selected from
whom the material has to be obtained. The company gives purchase order to the vendor.
5) Good's receipt -> vendors sends the goods to the company with goods receipt
6) Invoice verification -> this done based on good's receipt. this means that the ordered goods have
reached or not.
7) Payment -> payment is done based on invoice verification. this is (FI/CO) *-- Santosh Kumaar.M
Full MM Transaction Codes Flow:
RFQ to Vendor - ME41

Raising Quotation - ME47
Comparison of Price - ME49
Creation of PO - ME21N
Goods Receipt - MIGO
Invoice (Bill PAssing) - MIRO
Goods Issue - MB1A
Physical Inventory - MI01( Create doc)
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MI04 (Enter Count)
MI07 (Post)
The FI - MM integration:
First you define the g/l master records.

1) Inventry raw material a/c
2) GR/IR clearing a/c
3) Raw material consumption a/c
Above like this you define all required g/l accounts then you will go to T.CODE - OBYC
Double click BSX (this is transaction key)
" GBB
" WRX
" PRD
These are transaction keys important.
Then you go to T CODE - OMSY (this is also important) then
Material creation T Code MM01
then
1) Purchase order T.code ME21N
2) Goods received " MIGO
3) Invoice verification " MIRO
Material Master
Q: How can I extend all material to a new plant?

A: The SAP program - RMDATIND is used to create /update material master record.
Q: How can we delete materials permanently from Material master?

A: Use transaction MM70 - Material Master->Other->Reorganization->Material->Choose.
Build variant with selection range of material master records to be selected for deletion and maintain
run parameters. Execute.
Use transaction MM71 - Material Master-> other-> Reorganization->Material->Reorganization
Build a second variant
Maintain run parameters and execute.
It is also important to remove the records manually from info record, POs, PRs, reservation etc for
successful deletion of the material.
Q: SAP only provides moving average value for current, previous period, and previous year. SAP does not
provide transactions/reports that will provide moving average value for a given date.
How can I report moving average price for material number 10000000 at plant 0001 on July 4, 1998.
A: Try any of these solutions:
1. Change the updating level of the structure (S031) to "daily". In LIS the total value and the total stock
are available. Divide value by the stock. It is possible to calculate this dynamically when the analysis is
run and to display the result.
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2. Create your own structure in LIS and populate it by copying the Moving Average Price from the
material master every time there is a transaction. You will have data on those days when there was a
transaction.
Q: We have defined all the variables for the materials. However, when I attempt to use Material
Matchcode object MAT1, I get the response "No possible entries found". Why?
A: Matchcode i.d. "B", "Material by bill of material" has a selection condition for field STLNR NE ' '. STLNR
is the BOM number associated with a material in table MAST. Hence the message - "no possible
entries..." pops up if there are no bills of materials associated with your material numbers. You get the
matchcodes as long as the material referred by you has BOM number associated with it.
Q: The matchcode object selection is defaulted to matctcode ID "B". Iwould like to change to

M "Material by Description" What is the solution?
A: Press the pull down arrow on the material number field and matchcode "B" is displayed, press F5
double-click matchcode i.d. "M", then press F6 . This will set matchcode "M" as the default.
Q: We have one material master : X and the unit of measure is 'pcs' and two serial number : A,B
For this material we make two Pos
First PO calls material X , 1 pcs price 100 (will use serial number A)
Second PO calls material X , 1 pcs price 250 (will use serial number B)
Goods Receipt is done and by filling serial number for the fist PO with A and the second PO with B.
We want to transfer material X serial number A to another plant and want the valuation of this material
as 100. How we can do it ?
A: Use "split valuation". Stocks may be received into separate storage locations. Transfer stocks may be
done from a storage location/plant to another storage location/plant.
Q: We want to change the calculation of Moving Average Price. We know that the same is in MBEW-
VERPR and two transactions to consider - MRHR, MB01. Is there a transaction to change MAV or all the
places it is needed?
A: Any Goods receipt or issue (in case of split valuated material) changes Moving Average price
depending upon the valuation type which is used when posting the goods issue. You have to go through
all the transactions involving those!
For Example:
Material X is using split valuation by origin:
Malaysia : MAV 60 USD - total stock 100 units
India: MAV 50 USD - total stock 200 units
Total stock 300 units MAV 53.33
Here , goods issues will also affect the global MAV, despite not changing MAV from origin country.
Q: What is the use of configurable material.?

A: Configurable material is useful if you have a large number of combination of parts that go into a
product. It means different permutations and combinations of the parts for same material. If you
maintain a unique material code for each combination , you require a large number of material
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numbers. KMAT may be used in such a case where you maintain just one generic product code. A super
BOM is maintained for such a material consisting of all possible alternatives. A routing is also maintained
consisting of all possible operations that could be used. Typically configurable material is used in Made
To Order (MTO) environment. However frequently ordered configurations may be planned with a
material variant which needs to have a material master record. Thus Material variants may have stock
and value. Depending upon characteristic values chosen at sales order entry Sales Order BOM is created.
Routing operations are also chosen depending upon which BOM components are assigned to them.
Q: Will Source List automatically appear in Material Master as default if maintained at plant level using

OME5?
A1: If you have maintained source list requirement in OME5 and have not maintained the source list for
the material , Po can not be released. You are required to maintain source list for all materials in the
plant where the indicator is set if you maintain source list at plant level. Else you can make use of info
record to do so automatically.
Q: We have One company with a plant and another company with a sales organization. Which is better
option between these - PO or Stock Transfer Order ?
A: Cross company Stock Transport Orders can be done.

# Configure using transaction OMGN.
# Depending upon the sending and receiving plants, maintain sales organization and customer data in
customizing.
# Maintain the supplying plant as a vendor and attach the plant to the vendor in the Vendor Master.
# Material type has to be HALB or HAWA.
# Ensure that the company with sales Organization has a plant to take care of stocking.
# The PO used is NB and not Stock Transfer PO.
Configure SD for inter-company billing to enable picking up the pricing procedure for billing.
# Carry Out delivery through process delivery due list and billing through process billing due list.
Q: We can make field mandatory. We want to make a default value to a Particular field in the Material
Master. Say, We want that the period indicator in the MRP2 view as "P". What is the best way?
A: Use transaction variant. Transaction SHD0 and then Transaction SE93.
Can any one tell me what is MM closing and what is FI closing? How can I know if period is closed?
MM closing means that you can not post materials document. In MM area you have two open periods
current and previous.
If you do not set other in MMRV - here you can check which are the open MM periods for company
code. If you check Allow posting to previous period - it will forbid MM posting in previous period.
FI open period (ob52) allow to post FI documents. As I know you can allow postings for some accounts -
for example forbid material accounts for previous period in order to prevent MM posting until you finish
114 | P a g e
all FI documents.
*--Monika Hubanova
Related:
Movement Error - Posting Only Possible Between
Movement Type Posting Error In Delivery
How to add an attachment to a Purchase Order in SAP?
You can attach manually any document to PO without using Document Management System ( DMS ) in
SAP 4.6C.
But you cannot attach document while you create PO in T/Code ME21N
Save you PO ( ME21N ) and again open with change ( ME22N ) then you can attach document through
Service for Object button. Service for Object button available down side of Command screen ( in your PO
screen ME22N )
Click your Service Object button -> Create -> Create attachment
then select your window directory ( which file you need to attach) select your file Now your system
shows message Service "Create attachment" is started.
Save again your PO. You can see (open) your attachment in same field ( Service for Object ) select and
Create and check attachment list. You can attach as many document in your PO.
Note: This is only information for internal or you can print separately this document for sending to
vendor ( fax ) System will not print automatically along PO print out.
SAP MM Tips by : Bahadur
What is the difference between Blanket Purchase Order and the Framework Order?
In general the Blanket POs are used for consumable materials such as Xerorx papers with a short text
(does not need to have Master Record) with Item Category ' B' i.e.limit, where in the PO validity period
as well as the limits are to be mentioned for the simplicity of procurement.The doc type is 'FO'
(Framework Order).
The GR or Service Entry for the PO are not necessary in case of Blanket POs as well as one need not to
mention the account assignment category during creation of PO it can be 'U'-unknown & can be
changed at the time of IR.
Abhiji JOshi.
I have two issues:

1) Auto P.O.: In MMR & Vendor Master Record (Control data) I have checked 'Auto PO'....I have created
the Purchase Req for the Material.....Now I want to know how the automatic PO will come into force...I
mean what steps to do after creating PReq.
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2) Source List: I have checked 'Source List' In Purchasing view of MMR...Have two vendors for this
material for which source list is also maintained(ME01)....While creating PO..the system takes by default
the first vendor....I tried to assign the second vendor (made sure that validity period are in range)..but
couldn't do so...Can you suggest how the system will tell me to select one of the vendor I want to assign
to the PO.
1. For Auto PO , yo should proceed as follows:

* Auto P.O.: In MMR & Vendor Master Record - checked(MM02/XK02)
* Maintain Source List & select the indicator for source list record as MRP relevent.(ME01)
* If more than one source list records are generated, make one of them as fixed.
* Run MRP , the PR's generated will be preassigned with the source of supply.(MD01)
* Enter T Code ME59 for automatically creating PO's from PR's.
2.* Check if the assigned Source in PR is not fixed in Source List.

* Check if the info record for source not assigned, is having valid conditions.
Prem Bhardwaj
Why system giving me only warning message instead of error message when I am trying to make GR
with a material which already tick for deletion flag. Is there any configuration mistake?
Through OMCQ , set message no M7 430 for error.
Supian
When I want to settle Framework order. On Information Text, I had a message "Invoicing plan: No
message was found for partner 100454/company code 2000" I had investigate that error on message
determination and still the
error occurs. Maybe I miss the setting in message determination. Can you tell me how to set Framework
order Settlement message determination.
According to SAP Notes, when an invoicing plan is settled, you can create a document/e-mail or etc to
notify your supplier or internal personnel. The IMG setting (SAP 4.7) can be set in Material Mgmt -->
Logistic Invoice Verification --> Message determination.
Another way is if the creation of these docs are not required, turn off the message by setting the
message display from 'Error' to 'Information'. The IMG setting can be set in Material Mgmt --> Logistic
Invoice Verification --> Define Attributes of System Messages. This is what I did on my side.
Charlie
Have any one you done this in IM: Inactivating the standard Movement Types. Say for eg. I don't want
to end user to use this MType 501- Receipt without ref to PO.
I don't want to delete this movement type, being an SAP standard one. One option what I thought of is
to control in the authorisation profile, profile to exclued selected movement types.
Is there any other way we can do this?
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You can delete the accounts assignments which are used for 501 movement type, in T030 table.
Transaction code is OBYC.
or
1. Use transaction OMJJ

2. Enter movement type 501
3. Remove MB01 from allowed transactions
Difference Between Client , Purchasing Org , Plant , Company code
What is the technical difference between Client , Purchasing Org , Plant , Company code?
Client : Unit within SAP system, self-contained, separate master data with independent set of tables. It
represent corporate group.
Company Code : Smallest organisational unit of external account for which a complete, self-contained
bookkeeping system can be replicated. eg, company within a corporate group.
Plant : An organisational unit within logistics, subdivides an enterprise from the viewpoint of production,
procurement and materials planning.
Purchasing Org : Organisation within logistics which subdivides an enterprise according to purchasing
requirements.
The procurement business process uses this organisational structure:
Client--->Company Code--->Plant--->Storage Location--->Purchasing Org/ Purchasing group
SAP MM Tips by : Mabaile Mashao
The standard procedure for creating a new plant in SAP:
SPRO -> Enterprise Structure -> Logistics - General -> Define, copy, delete, check plant
What is MMR (Material Master Record)?
MMR is a data record containing all the basic information required to manage a material.
It's a master record maintained in the system that contains all the specific data relevant to a material.
Number Assignment:
MMR can have either internal or external number range assigned as per the configuration done at the
time of implementation.
Material type:
Materials which have similar characteristics are grouped under the same material type.
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Material type controls
1. Number range
2. Screen sequence
3. User departments/ views
4. Type of procurement
5. Internal or external number assignment
Material valuation:
- Standard price procedure - price control is "S"
- Moving average procedure - price control is "V"
1) Transaction codes used with MMR are as follows:
a. Change MMR - MM02
b. Display MMR- MM03
c. Materials List - MM60
d. Schedule changes - MM14
e. Display changes -- MM04
f. Change material type - MMAM
g. Mass maintenance - MM17
h. Flag for deletion - MM06
i. Maintain storage locations - MMSC
j. Extend Material views - MM50

2) Example of a step by step to create Material master record.
Internal number assignment is considered here.
Key in Transaction code MM01 in the command field.
Select Industry sector is Mechanical Engineering and material type is Raw Material ROH
Press Enter
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Select views
Basic data 1
Basic data 2
Purchasing
General Plant data
Accounting 1
Click on check symbol or press Enter
Key in plant and storage location codes in the populated screen then press Enter.
Enter description of the material (e.g. Ball bearing with specification), base unit of measure, material
group
Press enter, basic material is e.g. steel
We are maintaining the mandatory fields first then additional fields.
In purchasing view select purchasing group "001".
Press enter and in the next screen of accounting view 1 enter Valuation Class as e.g. 3000 and any
standard price then on saving it MMR is generated.
New Material is now created in the given Plant.
Movement Type and GL Account Determination
Any report to show which account with what movement type? As we have too many movement type
with different account, we want to download it from system and check.
By: Roger
In transaction OMWB (it require to input material no.), go to the simulation mode, then in menu
Simulation --> Go to Report. There, you can give the plants, valuation classes and movement types and
execute the report. Then you can download it to excel and analyze.
or
In the initial screen input the plant, material number and movement type and then go to simulation -->
report. It will take you to simulation of automatic account assignments : Inventory Management which is
independent of materials and there you can get the desired report.
Account no. with movement type
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Different materials will use different accounts during movement. This is defined by the Valuation Class
the material is assigned to. Also, movement definition also differs with the type of movement, i.e., a
consumption on a production order has a different movement than a consumption on a sales order.
These movements are therefore linked to Transaction/Event Keys, which are the accounting reflection of
the movement.
Call transaction OMWN, Account Grouping for Movement Types. This table will provide you with the
Transaction/Event Keys for the movement. Withine a movement
type, these will differ based on the movement, consumption type, etc. The tables behind this are T156X
and T156W.
With this Transaction Key information, read the table T030 (OBYC) using the Val Class and the Chart of
Accounts to get the GL Accounts.
How to find out how G/L account is determined with respect to movement type for various material
types?
G/L a/c is decided not only by Movement type, but also material master/plant/type of
transaction(transaction key). Movement type in OMJJ is contains transaction key / Account modifier
which is the link for GL a/c.
In material master we maintain valuation class. Hence when we do let us say GR for Purchase
order(101), the G/L account is decided as below:
Let us say movement type 101
Account modifier = space
Check in OBYC
As you are aware for any transaction there will be +ve and -V entry in GL a/c
Which a/c has to be -ve and which has to be + is decided by posting key depending on transaction.
Hence When we do GR...Stock a/c will be +, GR/IR will be -Ve and any price difference(if price control is
-S) will be posted to price difference account.
Inventory posting is done through BSX
Price difference will goto PRD
GR/IR will goto WRX
In OBYC, check the transaction BSX, for a given Chart of A/c, for a given valuation modifier(it is nothing
but plant grouping) and valuation class, you can see the G/L account. This data is available in table T030
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You can see the posting key for debit and cr. That means when we do 101, then Stock will be credited
and that posting key is used, if you do reverse GR-102, then same stock a/c will get debited with that
posting key
For the transaction PRD, you will get addition to the above, one more column General modifier, this is
nothing but the account modifier in OMJJ for that movement type, i.e. Same transaction i.e. GR, if i
define a different account modifier, I can change the G/L account so that new movement type PRD
(variance) can be collected at different G/L account.
Like that WRX, in which it is maintained at client level no a/c modifier, no valuation class etc...that
means GR/IR account determination will not depend on movement type/material/plant etc.
Movement Error - Posting Only Possible Between
This is a very common Goods Movement error that SAP end users will face and it is related to posting
period. You can easily solve by checking your posting period configuration again.
These tcodes will help you to solve the posting period error:
OMSY
OB52
MMPV
Support Ticket 1:

While doing goods receipt for order, the following error occurs, it says POSTING ONLY POSSIBLE
BETWEEN 11/2012 AND 10/2012
Movement type: 101

Order: 60002765
Plant: 1000
Storage Location: 0002
Support Ticket 2:

I am trying to do GR after creating PO. It is showing an error message "posting only possible during
11/2012 and 10/2012". I went into open and close posting periods in FI (IMG) and tried opening new
periods but it is still not allowing me to proceed further and is showing the same message.
Go to T.Code MMPV :
1. Enter your company code.
2. Fiscal year of the current period (in your case 2012).
3. Put the period as 12.
4. Check the radio button for check and close period.
5. Execute.
6. The system does say it is not current calendar year. (do not worry about this).
7. Hit Esc and
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8. Now change the Fiscal year to 2013 and
9. Period to 1
10. Execute
Continue these steps until you reach your period and fiscal year.
Support Ticket 3:

I am facing a problem with fiscal year. When I am trying to close the periods with MMPV, it is saying
that 'specify a present calendar'. It is not allowing me to receipt GR and post the invoice. And also when
I am trying to change the next period through navigation (SPRO/Logistics General/Material
master/Maintain company codes for matl management) it is saying that this company code can no
longer be initiated. Our SAP was installed recently.
To maintain fiscal year
SPRO - Logistics General - Material Master - Basic Settings - Maintain Company Codes for Materials
Management - Execute - Select Company Code and Define the Fiscal Year
Year = 2013
P(month) = current month
F/yr = 2013
M = Previous Month
ABP = Allow Back Posting (tick this to allow user to post to Previous month), DBP = Disallow back posting
SAP Split Valuation for Materials
The SAP R/3 System allows you to valuate stocks of a material either together or separately, that is,
according to different valuation criteria. Split valuation is necessary if, for example:
1. Stock from in-house production has a different valuation price than externally procured stock.
2. Stock obtained from one manufacturer is valuated at a different price than stock obtained from
another manufacturer.
3. Different batch stocks of a material have different valuation prices.
4. Value damaged and repair part differently from a new part.
To used split valuation, you have to activate it using 'OMW0'.
To change split material valuation once it has been set, you must
1. first post out all stocks (for example, to a cost center or with movement type 562)
2. then change the control parameters
3. if necessary, change the automatic account determination
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4. finally post the stocks back in again
In split valuation, you can distinguish between partial stocks of a material according to certain criteria
and valuate them separately.
The material stock is divided according to valuation category and valuation type.
The valuation category determines how the partial stocks are divided, that is, according to which
criteria.
The valuation type describes the characteristics of the individual stocks.
With the function "Setting" you can determine:
which valuation categories exist in your company (global categories)

which valuation types exist in your company (global types)
which valuation types belong to which valuation category
which valuation categories exist in a valuation area (local categories)
Your entries are only relevant if you set split valuation as active in the function "Global settings".
In the standard SAP R/3 System, the following valuation categories are default settings :
B procurement type
with the valuation types:
"EIGEN" for in-house production

"FREMD" for external procurement
H Origin
X automatic valuation (only for batch)
To select split valuation ('OMWC'), proceed as follows:
1. Determine the valuation categories and valuation types that are allowed for all valuation areas:
global valuation categories via menu "Goto --> Global Categories"
global valuation types via menu "Goto --> Global Types"
2. Allocate the valuation types to the valuation categories.

a) Select "Goto --> Global Categories".
b) Position the cursor on a valuation category and select
"Goto --> Global Categories --> Assignments --> 'Types->Category'".
c) Activate the valuation types you want.
3. Determine the local valuation categories for each valuation area.
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a) Select "Goto --> Local definitions".
b) Position the cursor on a valuation area and select
"Goto --> Local Definitions --> Allocate Categoires->Org.units (button Cats->(OU)".
You obtain a list of the global valuation categories.
c) Activate the categories to be used in this valuation area.
The system creates the local valuation types based on the allocations under point 2.
Only now can you create a master record with split valuation.
Specifying Split Valuation by creating Material Subject to Split Valuation
1. Create a material master record, selecting the Accounting View 1.
2. Enter your data as required on the Accounting data screen, specifying a valuation category.
(If you can't find the valuation category field, it might be hidden, use OMSR to define the Field
Groups.
Look for the field MBEW-BWTTY for Valuation category).
3. Be sure that the price control indicator is V for moving average price and enter a moving average
price.
4. In the case of split valuation, you can create only one valuation header record with price control
V because the
individual stock values are cumulated, and this total value is written to the valuation header record.
This is where the
individual stocks of a material are managed cumulatively. To do this, fill in the Valuation category
field on the accounting
screen when you create the material master record and leave the Valuation type field blank.
5. Save your data and the system creates the valuation header record.
6. The initial screen appears.
7. Extend the material by creating new material master records from the Accounting view 1. For the
first material, specify a
valuation type in the Organizational Levels dialog box and enter the respective accounting data on
the data screen.
Proceed likewise for the other materials, distinguishing between them by valuation type. To do this,
call up the material in
creation mode again. Due to the fact that a valuation header record exists, the system requires you
to enter a valuation
type for the valuation category.
8. Repeat step seven for every valuation type planned.
You want to valuate the stock of material XYZ that you obtain from manufacturer A in Los Angeles at a
different price than the stock you obtain from manufacturer B in Detroit. In this case, the valuation
category is H for origin. Your valuation types can be LOS ANGELES and DETROIT.
If a material is subject to split valuation, every quantity (sub-stock) of this material must be assigned to
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a valuation type (for example, country of origin).
For every valuation type, there are two types of data in the system, as follows:
Valuation data (for example, valuation price, total stock quantity, total stock value), which is defined for
every valuation type at valuation-area level and applies to all dependent storage locations.
Stock data, which, like batch data, is managed separately for each storage location. If a material that is
subject to split valuation is also subject to management in batches, its stock data is not managed by
valuation type, but rather by batch. Every batch is assigned to a valuation type.
The stock quantity, stock value, and valuation price for all valuation types are managed cumulatively at
valuation-area level.
Must the Valuation Type Exist Before the First Goods Receipt?
You can post the goods receipt of material of a certain valuation type only if the valuation data for this
valuation type already exists, because the system valuates the goods receipt at the price defined in the
valuation data. On the other hand, the stock data for the valuation type is created automatically during
the first goods receipt into the storage location, if this is defined in Customizing for Inventory
Management.
Goods Movements with Materials Subject to Split Valuation
If you want to enter goods movements for materials subject to split valuation, you must enter the
valuation type in addition to the material number.
Enter the valuation type in the Batch field for MB01.
In MIGO, there is a valuation type field in Detail data -> Material.
Changing The Valuation Class
Initially my company used to manufacture a particular component in-house so that material was
assigned to a particular valuation class in the material master records. But now they have started
externally procuring that component in which case the valuation class should change from RM
component manufactured category to bought out component category.
By : Venky
You use the Transaction Code : MMAM
Go to MMAM and then give the material and give the new valuation class and execute it. That material
have change from old valuation class to new valuation class.
Example: You create material No: 678 under the Finished goods. Finished goods valuation class is 7920
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is assigned in Accounting Tab 1. You want to change "678" material to Raw Material.
Go to T.Code : MMAM
Material : 678
New Valuation Class : Raw Material ( Select from F4)
Which Valuation area you want
Old Valuation Class : Finished goods ( its under gray mode
i.e can not change)
Then click execute it (F8)
678 Material automatically change from Finished Goods to Raw Material. Raw Material Valuation Class :
3000, is automatically updated in the material "678" in the accounting tab 1.
How to track the price changes in material master record if it changes through MR21 ?
Use the Following Trxn Codes for Material Price Change Documents
- CKMPCD
- CKMPCSEARCH
Table :
- MLHD - Material Ledger Document: Header
- MLIT - Material Ledger Document: Items

How to calculate MAP?
MAP is automatically calculated based on the Total Stock and Total value of the material at a particular
point of time.
The MAP details are available in MBEW table
MAP keeps changing based on either Goods Receipt or Invoice Verification, when there is a change in
the price.
Calculation of MAP:
IN MMR (Stock)
Price - 50
Qty - 2
in PO
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Price - 51
Qty - 4
After GR for 4 qty price updation in MMR will happen
(MMR (price*qty) value + MIGO (price*qty) total value)/total qty
In our example:
(50*2+51*4)/6 = 50.65
Price will be updated to 50.65.
MMR price - 50.65 qty - 6
MIRO price - 52 qty - 4
Do the same calculation to get updated MAP.
What are the year end activities as far as MM is concerned?

What are the month end & year end activities of a MM Consultant?
As a year end activity maintenance of GR/IR clearing a/c is usually taken care by FI consultant.
Month End Closing:
a. MM period closing, using MMPV (this initializes the one period and at the same time it closes the
previous one).
b. Physical Inventory if required.
c. Material Ledger Closing (If material ledger is activated).
Year End Closing:
a. GR/IR Clearing Account settlement.

Account balance i.e. GR/IR clearing, these accounts may have some difference due to credit memos
generated and no deliveries for the same or may be no GR posting for later deliveries because of the
closed period.
b. Physical Inventory. (Run T Code MI22 - look at "Doc status" - any open PI not yet Post Difference)
c. Material Ledger Closing (If material ledger activated).

From MM point of view note down the followings:
1) Check for open POs which are pending for GR (which are supposed to be posted in current year).
2) Check for open Physical inventory docs.
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3) Check for Subcontracting that are still pending (which are supposed to be posted in current year).
4) Make sure all goods movements are completed in current year.
5) For excise number ranges - there is a list objects from which you need to maintain the number
ranges,
Please maintain the number ranges for the following objects:
T.Code: SNRO
1. j_1iintnum
At an Excise group
1. j_1irg23a1
2. j_1irg23a2
3. j_1iRG1
4. j_1irg23c1
5. j_1irg23c2
6. j_1ipla2
7. j_1iintpr2
8. j_1irg23d
9. j_1irg1_t (material level)
10. j_1iconpla (if Consolidated PLA is used)
At Series group
1. j_1iexcloc
2. j_1iexcexp
3. j_1idepinv
4. j_1i57Fc (57F Challans)
2. Number Range (Tcode OMBT)
1. Number range assignment for Accounting Documents (Finance).

2. Number range assignment for Material and Physical inventory document
3. Number range assignment for Goods receipt or issue slips.
4. Maintenance of factory calendar (Tcode SCAL).
Note: It is absolutely up to your company if you want or not to use the same number range in the New
Year.
MM Flow with Step By Step Process
Describe the MM process flow.
By: Sandhya
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The MM Process flow:
The typical procurement cycle for a service or material consists of the following phases:
1. Determination of Requirements
Materials requirements are identified either in the user departments or via materials planning and
control.
(This can cover both MRP proper and the demand-based approach to inventory control. The regular
checking of stock levels of materials defined by master records, use of the order-point method, and
forecasting on the basis of past usage are important aspects of the latter.) 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 past orders and
existing longer-term purchase agreements. This speeds the process of
creating requests for quotation (RFQs), which can be sent to vendors electronically via SAP EDI, if
desired.
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 adopts information 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.
Vendor scheduling agreements and contracts (in the SAP System, types of longer-term purchase
agreement) are also supported.
5. Purchase Order Follow-Up

The system checks the reminder periods you have specified and - if necessary - automatically prints
reminders or expediters at the predefined intervals. It also provides you with an up-to-date status of all
purchase requisitions, quotations, and purchase orders.
6. Goods Receiving and Inventory Management

Goods Receiving personnel can confirm the receipt of goods simply by entering the Po number. By
specifying permissible tolerances, buyers can limit over- and underdeliveries of ordered goods.
7. Invoice Verification
The system supports the checking and matching of invoices. The accounts payable clerk is notified of
quantity and price variances because the system has access to PO and goods receipt data. This speeds
the process of auditing and clearing invoices for payment.
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SAP Logistics (MM) Interview
What Functions are Supported in the SAP ‘Material Management’ (MM)?
The MM module of SAP supports the following functions:
MRP (Material Requirements Planning)
Procurement
Inventory Management
Inventory Valuation
What is ‘MRP’?
‘MRP (Material Requirements Planning)’ is nothing but the determination of which materials are
required, when and in what quantities, based on current information and forecasts.
Explain the Basic ‘Organizational Structure’ in MM.
The major Organizational Elements of MM include:
Purchasing Organization
Plant
Storage Location
The Purchasing Organization is typically attached to one Company Code. But a single Company Code can
have one or more purchasing organizations. One or more Plants are attached to a purchasing
organization. One or more Storage Locations are attached to a plant. One or more plants are assigned to
a Company Code, but one plant is attached to only one Company Code.
Depending on how the purchasing organization has been structured, you may come across three types
of structures as detailed below:
Cross-Plant Purchasing Organization - The purchasing organization caters to more than one plant of the
same Company Code.
Plant-Specific Purchasing Organization - Each Plant has it is own purchasing organization.
Cross-Company Code Purchasing Organization - A single purchasing organization is responsible for the
procurement activities of more than one Company Code. The plants attached to this purchasing
organization are also cross-Company Code. In this case, the purchasing organization is not attached to
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any of the Company Codes; instead, the various plants are attached to the purchasing organization. This
kind of purchasing organization is known as a central purchasing organization. This kind of organizational
structure is essential in the case of centralized procurement in an enterprise.
Define ‘Plant’ in SAP.
‘Plant’ in SAP can denote a manufacturing location, distribution center, or a warehouse. With unique
numbers identifying each of the plants, though these are all not all necessarily financial entities, they can
still be linked to a Business Area. The Plant is the place where you normally valuate the inventory in SAP.
The system, however, checks for the inventory either at the Plant or Plant/Storage Location during an
Order entry.
Explain the ‘Storage Location’ in SAP.
A sub-division of a plant, the ‘Storage Location,’ defines a location for materials that can be a
warehouse, bin, or a storage area of raw materials/WIP/finished product. You will manage the physical
inventory, material movement, picking, cycle counting, etc., at the storage-location level. In Warehouse
Management, the storage location is further subdivided.
Explain the ‘Purchasing Organization’ in SAP.
This refers to the organizational structure in SAP that is responsible for procurement of materials. The
‘Purchasing Organization’ is the top-most organizational element in MM, and this can take any one of
three forms such as (1) Cross-plant purchasing organizations (catering to more than one plant but within
the same Company Code), (2) Plant-specific purchasing organizations (with a 1:1 relationship with the
plant), and (3) Cross-company code purchasing organizations (catering to more than one Company
Code). Entrusted with the activity of negotiating the price, delivery conditions, etc., of materials from
vendors, the Purchasing Organization can further be subdivided into purchasing groups.
Explain the ‘Purchasing Group’ Concept in MM.
The ‘Purchasing Group’ carries out the actual activities of purchasing, and is assigned to a material in the
material master. The activities of several purchasing organizations can be done by one purchasing group.
Explain the ‘Valuation Area’ Concept in MM.
The valuation of a material is done at the ‘Valuation Area,’ which can either be at the Company Code
level or the Plant level. The level at which the valuation needs to happen is defined in the customizing.
Note that once it is defined, you will not be able to change it later!
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When the valuation is at the Company Code level, then the valuation of a material is uniform across the
plants attached to that Company Code. On the other hand, if the valuation is at the plant level, then the
value of the material is plantspecific and will vary from one plant to another. If you are using PP
(Production Planning)/MRP in your company, then the valuation has to be at the plant level.
What is a ‘Factory Calendar’?
A ‘Factory Calendar’ is a calendar that is country-specific with a list of public holidays (maintained via the
Holiday Calendar) and working days, which are Client-independent. The factory calendar helps in
controlling goods issues/receipts. Each plant is assigned a factory calendar, and the calendar must be
activated (through ‘CTS functionality’) before using it.
Explain How SD and MM are Connected in SAP.
The goods/services from a plant can be sold by one or more sales organizations. It is also possible that
single sales organizations sells goods/services for several plants. When the sales organizations sells for
more than one plant belonging to one or more Company Codes, then this is called inter-company sales,
and will require you to make some special configurations in the system. A sales organization, attached to
a Company Code, is further divided into distribution channels and divisions in SD. A division typically
represents a product line, and is assigned to a material in the material master.
Outline the Functions Supported by ‘Material Master.’
The ‘Material Master’ is the central master record catering to various business functions in Logistics. The
data stored in this master support a variety of business functions and operations such as:
Production Planning
MRP
Procurement
Inventory Management
Product Costing
Sales and Distribution
Quality Management
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The data is stored, within a material master, at different organizational levels. The general data is valid
for all the Company Codes at the Client level. The purchasing information is valid at the plant level. The
sales information is valid at the sales organization/distribution channel. Lastly, when Warehouse
Management is activated, the data is maintained at the warehouse number/storage type level.
Explain Why a ‘Material Master’ is Divided into ‘Views.’
Since the information in a material master needs to be maintained by a number of users across several
modules, SAP has structured the master into a number of Views for facilitating easier access and
updating of data. The views include:
Basic Data
Classification
Sales
Purchasing
Purchase Order text
Accounting
Foreign Trade
Work Scheduling
Forecasting
Storage
Costing
Plant/Storage Location stock
MRP
What Information is Available in the ‘Accounting View’ of a ‘Material Master’?
The most important information maintained in the ‘Accounting View’ of a material master is the
valuation class, which needs to be assigned to individual materials. The valuation class, in turn, helps in
determining the relevant GL accounts for posting valuation-relevant transactions such as GR, GI, etc.
You will maintain the price control indicator in the accounting view, which enables determining how the
stock of a material is to be valued (at Standard price (S) or Moving average price (V)).
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Why do You Need ‘Material Types’ in MM?
One way to group materials is by ‘Material Type’ (the other being by Industry Sector’). This grouping
helps determine what information or data is to be made available at the material master level for a
particular material.
The material type (for example, FERT, HAWA, HALB, ROH, and so on) is used to control:
Which Views can be maintained on the master record
Which Fields are mandatory, optional, or for ‘display only’ in the material master
What kind of Procurement is allowed for that material (internal or external or both)
How to Number (Internal/External) and what Number Range is allowed
Whether Quantity and/or Value updating should be done in a particular Valuation Area
Which GL Accounts will be posted to (via the Valuation Class) during goods movement
The default Item Category Group (S&D)
The default Price Control Indicator (S or V) and
Whether the default Price Control Indicator is changeable during material master maintenance
Explain the ‘Price Control Indicator.’
The ‘Price Control Indicator’ is used by SAP to determine how a material will be valuated, by default. The
indicator can be set to:
Standard Price (S) or
Moving Average Price (V)
When you set the indicator to ‘S,’ the system carries out all the inventory postings at the standard price.
The variances due to a different price of a material in goods movement or invoice receipts if any, are all
posted to price difference accounts. As a result, the standard price remains the same, unless it is
changed intentionally by manual processing. This will be necessary only when the difference between
the standard and moving average prices becomes very large. (While updating the price difference
accounts, however, the system also updates the moving average price with these variances, so that you
get a chance to adjust the standard price should the difference between the standard and moving
average prices becomes very substantial.)
On the other hand, when you set the indicator to ‘V’ then all the goods receipts (GR) will be at the GR
value. The system will then adjust the price in the material master by the GR price. However, if there is a
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difference between the moving average price of the material and the goods movement/invoice receipt,
then the price difference is moved to the stock account, and the price of the material in the material
master is adjusted accordingly.
Explain ‘Prices Maintenance’ for Materials Transferred from ‘Legacy’ to SAP.
Before you transfer the initial inventory from a legacy system to SAP, you need to create the relevant
master data for the materials.
If you are planning to maintain a standard price for the materials, then you will create the material
masters with ‘S’ as the price control indictor in SAP. With this control, when you enter the material
inventory, the system valuates this stock with the standard price defined. In this case, you enter a new
price and the system posts the price difference (between the standard price and the new price you
entered) to a price difference account.
Similarly, if you are planning to maintain a moving average price for materials, then you will create the
material masters with ‘V’ as the Price Control Indictor in SAP. With this control, when you enter the
material inventory, the system valuates this stock with the moving average price defined. In this case,
you enter a new price and the system adjusts the moving average price accordingly. If you enter only the
quantity, and not any new price, the system continues to valuate the stock at the original moving
average price, and the price of the material does not change.
What is the ‘Material Status’?
The ‘Material Status’ is a 2-digit code enabling you to control the usability of material for various MM
and PP applications. This status key also controls warehouse management, transfers order instructions,
quality inspection instructions, decides how the system behaves when a product cost estimate is
created, and so on.
The material status can be maintained as (1) Plant-specific material status, (2) Cross-plant material
status, and (3) Distribution material status.
What is the ‘EAN’?
The ‘EAN (International Article Number),’ equivalent to the UPC (Universal Product Code) of the United
States, is an international standard number for identifying a material, which SAP allows you to assign
(done in the ‘Eng./Design or Units of Measure’ screen) to the materials. The EAN is normally assigned to
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the manufacturer of a material. Made up of a prefix (to identify the country or company from where the
material originates), article number, and a check digit (ensures correctness of an EAN number so that no
incorrect entries are scanned or entered into the system).
What are Some of the ‘Partner Functions’ of a ‘Vendor’?
Through the definition of ‘Partner Functions’ in the Vendor Master, SAP helps to designate vendors for
different roles. The partner role is designated by a 2-digit code.
VN Vendor
PI Invoice Presented by
OA Ordering Address
GS Goods Supplier
AZ Payment Recipient
A partner schema (also known as a partner procedure) is assigned to a vendor account group. The
procedure specifies which partner roles are ‘allowed’/‘mandatory’/‘can be changed’ for a vendor master
with that account group. You may assign three different partner schemas to an account group, one for
each level of purchasing data, i.e., one at the purchase organization level, one at the VSR level, and one
at the plant level. This enables maintaining different partners at different organizational levels.
What is a ‘Batch’ in the Context of ‘Batch Management’?
Representing a quantity of material with a homogenous set of properties/characteristics produced

during a particular cycle of manufacturing, a ‘Batch’ is a subset of inventory quantity, which cannot be
reproduced again with the same properties. A batch is linked to the classification system, and you can
use it only when the classification system has been set up properly for batch management.
A batch is unique for a single material, and is unique at the Client level as well. That is, you will be able
to use a batch number only once in the Client regardless of the plant and material. The batch will be
known only in the plant where it was created. The batch numbers can either be manually assigned or
system generated.
What are the Possible Values for ‘Procurement Types’?
The possible values for ‘Procurement Types’ are:
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No procurement
External procurement
In-house production
Both procurement types
What are the ‘prerequisites’ for an ‘MRP Run’?
The following are the ‘prerequisites’ for an MRP Run:
MRP activated
Valid MRP data for the material
Valid MRP type
Valid material status
What is an ‘MRP Area’?
An ‘MRP Area’ is not an organizational structure, but a unit for which you can carry out Consumption-
based MRP. The MRP area is used to carry out MRP for the components provided to a sub-contractor.
There are three types of MRP areas that you will come across:
MRP Area for Storage Locations
MRP Area for Subcontracting Vendor Stock
MRP Area for the Plant
What is an ‘MRP List’?
An ‘MRP List’ displays the results of the last ‘planning run.’ Using a ‘collective display’ format, you will be
able to display planning details for a number of materials for a given set of ‘selection parameters.’
Explain the ‘Re-Order Point’ Procedure.
The ‘Re-Order Point’ is the level of inventory that triggers material procurement. Once the inventory
falls below this level, you need to create the order proposal either manually or automatically by the
system.
In the case of the manual re-order point procedure, you will define the reorder point and the safety
stock in the material master. On the other hand, in the automatic re-order point procedure, the system
will calculate the re-order point and the safety stock based on the next period’s consumption pattern.
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Explain the ‘Inventory Management’ Submodule.
The ‘Inventory Management’ submodule deals with the GR/GI of materials from/into the inventory. It
also manages the transfer of materials from one storage location to another. As an important element
of MM, this module is integrated with SD, PP, QM, and PM modules.
What is ‘Goods Movement’?
‘Goods Movement’ represents an event causing a change in the stock, with the change being value or
status, stock type, or quantity. It also represents the physical movement of stock from one location to
another. Goods movement is classified into:
Receipt of goods/services
Issue of materials
Stock transfers
What Happens During a ‘Goods Issue’?
The ‘Goods Issue (GI)’ results in a reduction in the stock quantity/value. The GI can be Planned (via sales
order, production order, return delivery, delivery for internal, use etc.) or Unplanned (drawing a stock
for a sample, scrapping, etc.).
The GI results in:
Creation of a Material/Accounting document
Update of Reservation for the issue (if any)
Update of GL accounts
Update of ‘points of consumption’ if applicable (cost center, project, etc.)
Update of Stock quantity
Explain ‘Stock Transfers.’
The physical movement of stock between locations is called a ‘Stock Transfer,’ which can be within a
plant or between plants. Stock transfers can be carried out either in a single step or in two steps. The
stock transfer may be from:
Company to Company
Plant to Plant
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Storage Location to Storage Location
If there is a logical change in the stock type/status, then this kind of ‘transfer’ is called a ‘transfer
posting.’ The transfer posting may be from:
Product to Product
Quality Inspection to Unrestricted Use
Consignment Store to Storage Location
What is a ‘Stock Type’?
Used in the determination of available stock of a material, the ‘Stock Type’ is the sub-division of
inventory at a storage location based on the use of that inventory. In SAP, there are many kinds of stock
types:
Unrestricted (use) stock (the physical stock that is always available at a plant/storage location)
Restricted (use) stock
Quality inspection stock (not counted for unrestricted use and may be made available for MRP)
Stock-in transfer
Blocked stock (not to be counted as unrestricted stock and is not available for MRP)
Besides all of the above, which are all known as valuated stocks, you will also come across one more
type called ‘GR blocked stock,’ which is a non-valuated stock.
The GR-blocked stock denotes all the stock accepted ‘conditionally’ from the vendors. This stock is not
considered available for ‘unrestricted use.’ You will use the Movement Type 103 for the GR-blocked
stock and Movement Type 101 is used for a normal GR.
Explain ‘Return Delivery.’
You will use ‘Return Delivery’ when you return goods to the supplier (vendor) for reasons such as
damaged packaging, etc. Note that the ‘reason for return’ is mandatory as this will help you, later on, to
analyze problems with a vendor. The system uses the Movement Type 122, and will create a return
delivery slip, which will accompany the goods being returned.
If the ‘return’ is from a ‘GR-blocked stock,’ you need to use a different Movement Type: 104.
What are All the Various Types of ‘Physical Inventory’?
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The following are the different types of ‘Physical Inventory’ in SAP MM:
Periodic inventory (All the stocks are physically counted on a ‘key date’ (balance sheet date), and all the
stock movements are blocked during physical counting)
Cycle counting (Physical counting is done at periodical intervals)
Sampling (Randomly selected stocks are counted physically, and the system uses this information to
‘estimate’ stock value on a given date)
Continuous (Stocks are tracked continuously throughout the fiscal year, with physical stock taking once a
year, at least!)
What is a ‘Material Ledger’?
A ‘Material Ledger’ is nothing but a tool for inventory accounting that provides new methods for ‘price
control’ for ‘material valuation’ (you can store the material inventory values in more than one currency).
It makes it possible to keep the ‘material price’ constant over a period of time (say, over the life of a
production order). The moving average price field is used to store a ‘periodic price.’ This periodic price
stays constant and is the price used for valuation until you close the material ledger. At closing, the
periodic price is updated based on the actual value of invoice receipts received for that material during
the period.
Explain ‘Split Valuation.’ Why is it Necessary?
‘Split Valuation’ allows substocks of the same material to be managed in different stock accounts. This
allows substocks to be valuated separately, and every transaction is carried out at the substock level. So,
when processing a transaction, it is necessary to mention the substock.
The ‘split valuation’ is necessary if the material has:
Different Origins
Various Levels of Quality
Various Statuses
It is also required in situations where you need to make a distinction between ‘in-house produced
materials’ and ‘materials procured externally,’ or if there is a distinction between ‘different deliveries.’
Explain the Basic Steps in ‘Configuring Split Valuation.’
The five basic steps for ‘Configuring Split Valuation’ are:
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Activate ‘Split Valuation’
Define ‘Global Valuation Types’. For each Valuation type’ you need to specify: (a) whether ‘external’
purchase orders are allowed, (b) whether production orders are allowed, and (c) the account category
reference.
Define ‘Global Valuation Categories’. For each valuation category specify: (a) default ‘valuation type’ to
be used when purchase orders are created and whether this default can be changed, (b) default
valuation type to be used when production orders are created and whether this default can be changed,
and (c) whether a ‘valuation record’ should be created automatically when a GR is posted for a valuation
type for which no record yet exists.
Allocate ‘Valuation Types’ to the ‘Valuation Categories’
Define which of the ‘Global Categories/Types’ apply to which ‘Valuation Areas’
Outline ‘Stock Valuation Methods’ for Material Revaluation.
There are three methods with which you can revaluate your stock for Balance Sheet purposes.
Irrespective of the method you select, you will be able to valuate your stock either at the Company Code
level or at the Valuation Area level:
LIFO (Last-In-First-Out): This method is based on the assumption that the materials received last were
the ones issued/consumed first. The valuation is based on the initial receipt.
FIFO (First-In-First-Out): Here the assumption is that the materials received first are the ones
consumed/issued first. So, the valuation is based on the most recent receipt. The FIFO method can also
be used in conjunction with the lowest value method. By this you can determine whether the system
should make a comparison between the FIFO determined price and the lowest value price. You can also
determine whether the FIFO price should be updated in the material master record.
Lowest Value Method: Here, the stocks are valued at their original price or the current market price
whichever is lower. This method is suitable when the inventory needs to be valued to take into account
material obsolescence, physical deterioration, or changes in price levels.
How Does ‘Automatic Account Assignment’ Work in MM?
‘GL accounts’ are assigned to ‘Transaction Keys’ (BSX, WRX, PRD, UMG, GBB, etc.).
Transaction Keys identify which GL Accounts are to be debited or credited.
Transaction Keys are assigned to ‘Value Strings’ (for example, WA01).
‘Movement Types’ (for example, 901) are associated with a ‘Value String.’
Explain ‘Automatic Account Assignment’ Configuration in MM.
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There are four steps required to complete the ‘Automatic Account Assignment’ configuration settings
for MM:
Finalize the ‘valuation level.’
Activate the ‘valuation grouping code’ option. (For this you need to group valuation areas using
valuation grouping codes.)
Maintain ‘valuation classes’ and ‘account category references’ and their linkage to ‘material types.’
Maintain the ‘GL accounts’ for each combination of Chart of accounts, valuation grouping code,
valuation class, and transaction key.
You may use the ‘automatic account determination wizard’ to complete the configuration settings, as
the wizard guides you step-by-step.
Explain the ‘Transaction Keys’ in MM.
Also known as ‘process keys,’ the ‘Transaction Keys’ are pre-defined in the system to enable transaction
postings in Inventory Management and Accounting (Invoice Verification). For each of the movement
types in MM, there is a value string that stores these possible transactions.
The pre-defined transaction keys are:
BSX (used in Inventory Postings)
WRX (used in GR/IR Clearing Postings)
PRD (used to post Cost/Price differences)
UMB (used to post Revenue/Expenses from revaluation)
GBB (used in offsetting entries in Stock postings)
BSX, WRX, and PRD are examples of transaction keys that are relevant for a GR with reference to a
purchase order for a material with standard price control. The transaction key UMB is used when the
standard price has changed and the movement is posted to a previous period. Likewise, GBB is used to
identify the GL account to post to as the offsetting entry to the stock account (when not referencing a
purchase order) such as miscellaneous goods receipts, goods issues for sales orders with no account
assignment, and scrapping.
How Does the System Determine the Correct ‘GL a/c’ for a Posting?
Imagine that you are posting a goods movement.
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Since the goods movement is from a plant, and the plant is assigned to a Company Code, the goods
movement identifies the relevant Company Code.
As the Company Code has already been assigned to the Chart of Accounts, the system is able to identify
the GL accounts.
The plant also determines the valuation area (and the optional ‘valuation grouping code’).
Since each movement type is assigned to a ‘value string’ which in turn is identified with a transaction
key, the goods movement determines the correct transaction key.
Since each of the transaction keys is associated with the relevant GL accounts, through the value string,
the movement type now identifies the relevant GL Account, and the transaction is posted.
12. How is the MM module integrated with other modules of SAP?
 The MM module deals with materials procurement on the basis of the production required;
therefore, it is linked with the PP module.
 The SD module is proportionally related to the MM module, because it uses information about the
quantity of material sent for production.
 The WM module is related to the MM module, because the MM module maintains information
about materials storage and materials transfers inside an organization.
 The FI module is also related to the MM module, because every operation performed in the MM
module directly impacts the financial processes of the organization.
13. What are the main components of the MM module? How are these components used in SAP?
 The MM module deals with materials procurement on the basis of the production required;
therefore, it is linked with the PP module.
 The SD module is proportionally related to the MM module, because it uses information about the
quantity of material sent for production.
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 The WM module is related to the MM module, because the MM module maintains information
about materials storage and materials transfers inside an organization.
 The FI module is also related to the MM module, because every operation performed in the MM
module directly impacts the financial processes of the organization.
2. Organizational Structure
1. What is the organizational structure in the MM module?
The organizational structure in the MM module is a hierarchy in which various organizational units are
arranged according to their tasks and functions. The different organizational units that constitute the
organizational structure of the company are as follows:
 Client— A self-contained unit in the SAP system with separate master records and its own set of
tables.
 Company code— The smallest organizational unit. You can create an independent set of accounts
for this unit for the purpose of external reporting.
 Plant— An organizational unit where materials are produced or goods and services are provided.
You can divide an enterprise into various plants according to production, procurement, maintenance,
and materials planning.
 Storage location— An organizational unit where the goods produced in the plant are stored.
 Warehouse number— An alphanumeric key that represents a warehousing system, which is made
up of different organizational and technical storage areas.
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 Storage type— An area such as a goods receipt area, goods issue area, or picking area. Also the
physical or logical division of a complex warehouse.
 Purchasing organization—An organizational unit that procures materials and services and
negotiates with vendors to purchase materials or goods.
 Purchasing group— An alphanumeric key for a buyer or a group of buyers who are involved in
purchasing activities. The purchasing group is responsible for materials procurement and dealing with
vendors.
2. What are the levels of organizational units of Enterprise Structure in R/3?
The client is the highest level unit of the organizational units in Enterprise Structure in SAP R/3. The
client is followed by the company code, which represents a unit with its own accounting, balance, and
profit and loss (P&L). The next level of organizational units in Enterprise Structure is the plant, which
represents an operational unit of a company.
3. Define Client. What is its importance in SAP?
 A client can be defined as a person, company, or organization that purchases goods from another
person, company, or organization. In terms of SAP, a client is defined as a unit that has its own master
records and a set of tables. The client is important in SAP because it stores and maintains data about the
organization where SAP is implemented.
4. How to create a client in MM module?
You can create a client in the MM module either by using the transaction code SCC4 or by performing
the following steps:
 Select SAP Menu > Tools > Administration > Administration > Client Administration.
 Double click SCC4–Client Maintenance. The display view Clients: Overview screen appears.
 Select Display > Change. The information dialog box appears.
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 Click Continue. The change view Clients: Overview screen appears, where you can create a new
client.
5. Define company. How is it different from a client? What are the data in MM that are maintained at
the company code level?
 A company is an organizational unit for which individual financial statements are drawn per the
relevant commercial laws. A company consists of one or more company codes. Within a company, all
company codes must use the same transactions in addition to the same fiscal year breakdown; however,
company code currencies can vary.
 A company is different from a client because a client can itself be a company, or an organization
that has multiple companies. For example, the owner of the entire SAP system is a client. The system
will have only one operational client, but the client may further have a group of companies. The
following data are held at the company code level:
o Material number
o Classification data
o Multilingual description
o Units of measure
o Technical data
6. How to create a company code in SAP?
 In SAP, a company code is created using the transaction OX02. The company code field is
represented by a four-character alphanumeric string. You can create a company code in SAP by
performing the following steps:
o Open the SAP Customizing Implementation guide.
o Select Enterprise Structure > Definition > Financial Accounting > Edit, Copy, Delete, Check Company
Code. The Choose Activity dialog box appears.
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o Double-click Edit Company Code Data. The change view Company Code: Overview screen appears
where you can create a company code.
7. How can you assign a company code to a company in SAP?
 In SAP, a company code is created using the transaction OX02. The company code field is
represented by a four-character alphanumeric string. You can create a company code in SAP by
o Select Enterprise Structure > Definition > Financial Accounting > Edit, Copy, Delete, Check Company
Code. The Choose Activity dialog box appears.
o Double-click Edit Company Code Data. The change view Company Code: Overview screen appears,
where you can create a company code.
8. How many charts of accounts can be assigned in a company?
Yes. One chart of accounts can be assigned to several Company Codes. However, the reverse is not
possible; i.e., you will not be able assign more than one chart of accounts to a single Company Code.
9. How many company codes can be assigned in one chart of accounts?
You can assign many company codes to a chart of accounts.

10 How many company codes can be assigned to a company?
You can assign only one company code to a plant.

11. What is a plant in MM?
A plant is an organizational unit where materials are produced or goods and services are provided. In
SAP, a plant is represented by a unique four-digit alphanumeric number. A plant is allocated to one
company code, and a company can have many plants. In the organizational unit, a plant can be at one of
the following locations:
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 Corporate headquarters
 Central delivery warehouse
 Manufacturing facility
 Regional sales office

12. How is a plant defined in MM?
You can define a plant in the MM by performing the following steps:
 Select IMG > Enterprise Structure > Definition > Logistic–General > define, Copy, Delete, Check
Plant.
 Click Execute. The Choose Activity dialog box appears.
 Select Define Plant to create a plant. The change view Plants: Overview screen appears.
 Click New Entries. The New Entries: Details of Added Entries screen appears.
 Specify the plant code in the plant field.
 Click the address icon to display the Edit Address field.
 Specify the required values in the fields, such as Title, Name, and Search Term 1/2.
 Click OK. The New Entries: Details of Added Entries screen appears again.
 Click the Save icon to save the newly defined plant.

13. What are the prerequisites for creating a plant?
There are three prerequisites that are required in order to create a plant. They are as follows:
 Company calendar —Comprised of work days, public holidays, and company holidays. Every SAP
system is provided with a company calendar that can be modified per the schedule of the company.
 Country key —Helps in defining a plant.
 Region key —Refers to a state or province that is associated with the country. It is required along
with the country key.
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14. How many company codes can be assigned to a plant?
You can assign only one company code to a plant.

15. Can a company code be assigned to many plants?
You can assign many plants to one company code.
16. What is the menu path to assign a plant to a company code?
You can assign a company code to a plant by navigating the following menu path: SAP Menu > Tools >
Customizing > IMG > Execute Project > Display IMG (SAP reference IMG) > Enterprise Structure >
Assignment > Logistics-General > Assign Company Code to Plant.
17. Define Storage location in SAP.
 A storage location is defined by performing the following steps:
o Select Tools > Customizing > SAP Reference IMG > Edit Project.
o Select Enterprise Structure > Definition > Materials Management > Maintain Storage.
o Click the clock icon . The Determine Work Area: Entry dialog box appears.
o Specify the value (P001) for the plant in the dialog box.
o Click the check mark icon . The change view Storage Locations: Overview screen appears.
o Click New Entries. The New Entries: Details of Added Entries screen appears.
o Specify the value of the storage location and description fields.
o Click the Save icon to save the storage location.
o Click the Exit icon to create the storage location.
18. How will you define a storage location?
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A storage location is defined by performing the following steps:
 Select Tools > Customizing > SAP Reference IMG > Edit Project.
 Select Enterprise Structure > Definition > Materials Management > Maintain Storage.
 Click the clock icon . The Determine Work Area: Entry dialog box appears.
 Specify the value (P001) for the plant in the dialog box.
 Click the check mark icon . The change view Storage Locations: Overview screen appears.
 Click New Entries. The New Entries: Details of Added Entries screen appears.
 Specify the value of the storage location and description fields.
 Click the Save icon to save the storage location.
 Click the Exit icon to create the storage location.
19. How is a storage location assigned to a plant?
 You can assign a storage location to a plant either by using the transaction code OX09 or by
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o Select Enterprise Structure > Definition > Materials Management > Maintain Storage Location. The
view cluster Maintenance: Initial Screen window appears with the Determine Work Area: Entry dialog
box opened.
 In the Determine Work Area: Entry dialog box, enter a plant number and click Continue. The
change viewStorage Locations: Overview screen appears where you can assign a storage location to the
plant.
20. Can storage locations be created automatically? How can they be created automatically?
Storage locations can be created automatically when an inward goods movement for a material is
performed. In order to create storage location automatically, open the SAP Implementation guide and
click Materials Management > Inventory Management and Physical Inventory > Goods Receipt > Create
Storage Location Automatically.
3. Master Data in SAP MM
1. What is Master data in MM module?
The master data in the MM module acts as reference data, defining various business entities and playing
a key role in the core operation of the business.
2. How is master data important in MM module?
The master data in the MM module contains all of the basic information needed to manage material.
The data is stored and sorted on the basis of different criteria, such as the descriptive nature of the
material (size, dimension, and weight) and the control functions of the material (material type and
industry sector). Apart from data maintained by the user, the master data also stores data that is
automatically updated by the system (such as stock levels).
3. What are the various types of master data in MM module?
The different types of master data in the MM module are as follows:
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 Material master
 Vendor master
 Purchasing information record
 Source list
 Quota arrangement
4. What is a Material Master file?
A material master file stores and maintains all of the information related to managing a material. The
material master is sorted on the basis of different criteria.
5. Why are material master records used in SAP?
Material master records are used in the SAP R/3 system to manage material-specific data. The material
information stored in material master records is used by all logistics areas in the SAP R/3 system. The
material master records integrate all material-specific data into a single database object that eliminates
the problem of data redundancy. Because material master records store data in a single database
object, the same data can be shared by all departments, such as purchasing, inventory management,
materials planning, and invoice verification.
6. How is the information of material master records updated?
You can manually update the information in the material master records, however, there are some
exceptions for which the information can be updated by the SAP R/3 system only, for example,
administrative data.
7. What are the types of industry sectors defined in Material Master data?
 The different types of industry sectors defined in the material master data are as follows:
o Aerospace and defense
o Beverage
o Chemical industry
o Food and related products
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o Mechanical engineering
o Pharmaceuticals
o Plant engineering/construction
o Retail
o Retailing
o Service providers
8. What data in material master is maintained at the client level?
The general data, i.e., the data applicable to the company as a whole, is stored at the client level.
9. What are the data in material master that are maintained at the company code level?
The data that is specific to a particular company and the plant and storage areas assigned to that
company is maintained at the company code level.
10. What are the plant-specific data in material?
The MRP data and forecast data are the plant-specific data in the material master.
11. What is the lot size attribute of a material?
 The lot size attribute represents the reorder quantity for a material. A material can have a
periodic, optimum, or static (fixed) lot size.
12. How is material information structured in material master records?
Material information is structured in material master records on the basis of different criteria, such as
the material's master detail (including its name, size, dimension, and weight), which shows its
descriptive nature, and the material's detail related to control functions (such as material type, price
control, and industry sector). Material master records also store information about the data that can be
automatically updated by the system. For example, the stock level can be automatically updated by the
system on the basis of the material data update.
13. What is a batch?
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A batch is a group of materials combined into one quantity for various reasons. Very often, materials
with the same characteristics and values are grouped into a batch. For example, in the chemical
industry, a specified number of containers of a specific product may be considered a batch if they were
produced at the same time and have the same physical and chemical characteristics.
14. Why is batch record important?
 A batch represents a quantity of a particular material processed at the same time with the same
parameters. These materials, produced as one batch, have the same characteristics and values, which
may vary from the materials of another batch produced on the same day.
 A batch record is important because batch records indicate that the batch conforms to the current
Good Manufacturing Procedures (GMP). The batch record also contains specific information about the
product tested, analytical methods, and test results.
15. How to create a batch?
You can create a batch record manually by using the transaction code MSC1N. The navigation path for
creating a batch is: SAP Menu > Logistics > Materials Management > Material Master > Batch > Create.
16. What are the important fields in a batch master record?
 The important fields in a batch master record are as follows:
o Production date— Refers to the date when the batch was produced.
o Self-life expiration date— Refers to the date when the life of the batch will expire.
o Available from— Refers to the date from which the batch will be available to other departments.
o Batch status— Allows the batch to be classified as having restricted or unrestricted use.
o Next inspection— Refers to the next quality inspection date of the batch.
o Vendor batch— Refers to the batch number assigned by the vendor.
o Class— Allows the user to sort the batch for use in specific classes.
o Characteristics —Helps in assigning a class to the batch.
o Release status —Specifies the status of the batch.
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o Linked document —Helps the user to link the documents related to the batch.
o Document type —Allows the user who is purchasing the batch to specify a document.
o Document —Helps the user to select the relevant document.
o Document part —Allows the user to enter the part of the document that is related to the batch.
o Version —Specifies the document version of the batch.
17. How can batch records be changed?
 You can change a batch record by using the transaction code MSC2N. The navigation path of
changing the batch record is: SAP Menu > Logistics > Materials Management > Material Master > Batch
> Change.
 It is important to note that these changes to the batch record will also be available for review.
18. How to delete a batch?
You can delete a batch by using the MSC2N transaction code. You can alternately delete a batch record
by flagging the batch master record. For this, you need to first select the batch in the Change mode.
19. What is Batch Information Cockpit?
The Batch Information Cockpit (BIC) is the main switching point, having a wide range of options for
scrutiny and control of batches. It stores at a single location all the information related to the analysis of
a particular batch.
20. What are the levels at which a batch number can be configured?
A batch number can be configured at several different levels: client level, plant level, and material level.
You can select a batch number at any of the following levels:
 Client level— When you configure a batch at the client level, you need to assign the batch number
only once throughout the whole client. Only one batch number exists for each material assigned at this
level.
 Plant level —In SAP, the plant level is the default level for the batch number. At plant level, a
batch number is unique for a plant and material. This means that you can have a batch of the same
number at a different plant within the same company.
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 Material level —At this level, material numbers are assigned to the products. The material
number helps to differentiate between two products in case their batch numbers are the same. The
materials are identified by the combination of the material number and batch number.
21. How are batch numbers assigned?
The batch number is predefined in SAP. You can change the batch numbers either by using the OMAD
transaction code or by using the navigation path IMG > Logistics-General > Batch Management > Batch
Number Assignment > Maintain Internal Batch Number Assignment Range.
Follow either of the two configuration steps to change the batch number:
 You can assign a batch number internally using the internal number range, either by using the
OMCZ transaction code or by following the navigation path Display IMG > Logistics-General > Batch
Management > Batch Number Assignment > Activate Internal Batch Number Assignment > Activate
Batch Number Assignment.
 You can also configure the system to allow automatic numbering of a batch by following the
navigation path Display IMG > Logistics-General > Batch Management > Batch Number Assignment >
Activate Internal Batch Number Assignment > Internal Batch Number Assignment for Assigned Goods
Receipt.
22. What is a serial number?
A serial number is assigned to an item to identify it and to store information about it. A serial number is
mostly used to refer to equipment such as motors, drills, or vacuums. In MM, an item of material
contains a serial number as well as a material number. This combination helps to uniquely identify an
item of material.
23. What is a class type? How will you configure a class type?
 A class type is the SAP system's top-level unit, which is used to control the SAP system's classes. It
performs the following tasks:
o Defines the class objects
o Checks if class objects can be used in other classes or not
o Defines the class maintenance screen
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 You can configure a class type by using the following menu path: SAP Customizing Implementation
Guide > Cross Application Component > Classification System > Classes > Maintain Object Types and
Material Types.
24. A material does not have a master record. How can we procure that?
There may be instances when a material does not have a master record. You can perform different
functions in different situations to procure the master record. For example:
 You can create a material master record if there is no material master record for a particular
material.
 You can extend the material master record if the material master record exists for a particular
material but the user department does not have the master data.
 You can also extend the material master record if the material master record exists for a particular
material and the user department has the master data but it has been entered in a different
organizational level.
25. State the importance of classification data.
Classification data allows you to search for materials on the basis of the characteristic values entered
into the classes. This feature is very useful when the customer wants to search for a particular vendor
and particular batches.
26. What is an ABC indicator?
An ABC indicator is an indicator assigned by the ABC analysis procedure. An ABC indicator provides
details of the consumption value of the material involved in the ABC analysis. The ABC analysis is
performed by multiplying the current price of the materials by their quantity. The different consumption
values are given as follows:
 A materials—Important parts, high usage/consumption value
 B materials—Less important parts, medium usage/consumption value
 C materials—Relatively unimportant parts, low usage/consumption value
27. What are the main master files used in MM?
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The following are the main master files used in MM:
 Material master file
 Inventory master file
 Vendor master file
28. Give some example of master data in material management (MM).
Material master, material master general data (MARA), tax Classification material (MLAN), info records,
source list, and vendor master are examples of master data in MM.
29. How is the vendor created?
You can create a vendor by using the transaction code XK01 and performing the following steps:
 Add the vendor name, company code, purchasing organization, account group, and vendor
address.
 Add the country, bank key, bank account, and the name of the account holder.
 Save the data.
 This creates a vendor record in the system.
30. What is vendor master data?
Vendor master data contains details of each vendor that supplies materials or services to an enterprise.
The vendor master data is stored in individual vendor master records consisting of data, such as the
vendor's name, the vendor's address, the currency used for the transaction, payment terms, and the
contact person's name (on the sales staff).
31. What are the different sections in vendor master data?
Following are the three sections in vendor master data:
General data— Provides general information about the vendor that can be entered into the system for
creating vendor records. General data can provide the name, address, telephone, and fax of the vendor
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through specified search terms. Additional information can also be added to the vendor master record
by the accounting and purchasing departments using the transaction code XK01.
Accounting data —Refers to financial information entered at the company code level. The financial
information includes tax information, bank details, reconciliation account, payment terms, payment
methods, and dunning information. You can enter this financial data using the transaction code FK01.
Purchasing data —Refers to data entered while creating a vendor at the purchasing organization level.
Different purchasing organizations have different purchasing data. The purchasing data includes partner
functions, purchasing default fields, and invoice verification indicators. You can enter this data using the
transaction code MK01.
32. What are the different fields in vendor master data?
The different fields in vendor master data are as follows:
The name and address of the vendor
The currency in which the transaction will be done
The terms and conditions of payment
The names of important contact persons
The accounting information, such as the reconciliation account in the general ledger
33. How do we create a vendor number range?
When you create a number range, it is important to remember that vendor numbers, such as material
numbers, can be assigned externally or internally. You can create vendor number ranges by selecting the
following navigation path: IMG > Financial Accounting > Vendor Accounts > Master Data > Preparations
for Creating Vendor Master Data > Create Number Ranges for Vendor Accounts.
For configuring the vendor number range, you should enter a unique number for the range, which is a
two character field, and then specify the limit for the number range. The current number field is used to
define the current number. The Ext. field Specifies whether the number range is defined externally by
the user.
34. What is dunning procedure? How can it be configured?
Sometimes, you may need to send a payment reminder or a dunning notice to a person or an
organization to remind them of their outstanding debts. The process by which the system controls
dunning is called dunning procedure. Dunning procedure can be configured by using the FBMP
transaction code or the following navigation path: IMG > Financial Accounting > Accounts Receivable
and Accounts Payable > Business Transactions > Dunning > Dunning Procedure > Defining Dunning
Procedures.
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35. How do we assign material to vendors?
Select the following navigation path to link vendors to materials: SAP Menu > Logistics > Material
Management > Purchasing > Master Data > Info Record > Create. Alternatively, the ME11 transaction
code is used for this purpose.
36. What is the transaction code to access the Materials Management Configuration menu?
The OLMS transaction code is used to access the Materials Management configuration menu.
37. What are the various transaction codes to access the MM configuration?
The following are the various transaction codes to access the MM configuration:
Transaction Code Description
OLMD Accesses Material Management-Consumption Based Planning (MM-CBP)
OLMB Accesses Material Management-Inventory Management (MM-IM)
OLME Accesses Material Management-Purchase (MM-PUR)
OLML Accesses Material Management-Warehouse Management
OLMS Accesses the material master data
OLMW Enables valuation and account assignment
38. Write the names of some important MM tables
The following table lists the important MM table names:
Table Name Purpose
EINA Used for general data of the (purchasing) information record
MARC Used in plant data for materials
EINE Used for purchasing organization
MAST Used for bills of material (BOM) link
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Table Name Purpose
MKPF Used for header material document
MAKT Used for material description
MARD Used in storage location data for material
MARA Used for general materials data
MBEW Used for material valuation
39. What are purchasing information records?
Purchasing information records, also known as info records, contain information related to the material
and the vendor who is supplying the material. They also contain details about the material, such as the
current price.
40. What are the categories of purchasing information records?
The categories of purchasing information records are as follows:
Standard—Contains information for the standard purchase order. In this type of purchasing info record,
you can create info records for materials and services that do not have master records.
Subcontracting —Contains ordering information for subcontract orders.
Pipeline— Contains information on commodities that are sent through a pipeline, such as oil or water.
Consignment— Contains information on materials that are in the vendor's possession and are kept by
the vendor at some other premises at his own cost.
41. What are the prerequisites for creating a purchasing info record?
The prerequisites for creating a purchasing info record are as follows:
Material number —Before creating a purchasing info record, the material number of the material
master record should be known.
Manufacturer part number (MPN) material number —Before ordering a material that has an MPN, you
must know its MPN material number.
Vendor number —You should also know the number on the vendor master record.
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Organizational level —If the purchasing info record is for a particular purchasing organization or plant,
then the code specific to that purchasing organization or plant is required.
42. How can we create a purchasing information record?
You can create a purchasing information record either manually or automatically by setting the Info
Update indicator when maintaining a quotation, a purchase order, or an agreement.
43. Can a purchasing info record be created without a material number?
Yes, you can create a purchasing info record without a material number. If the material does not have a
material number, you will need the following information to create the purchasing info record:
Material short text
Order unit
Material group
Short term key
44. How can we create an information record based on the material master?
First, you need to create the info record by selecting SAP Menu > Master Data > Info Record > Create.
Enter details such as vendor number, material number, purchase organization, or plant number. Then
enter the number of the information record (in case of external assignments). Next, enter the general
data for vendors, ordered quantity, origin of data, supplying information, and customs tariff number.
Then enter the planned delivery time, purchasing groups, and standard purchasing quantity. Check the
control data and take the default value of tolerance data and the purchasing group from the material
master record. Finally, enter the net price and then select Go To > Texts to display the text overview. If
the PO text is already defined, it appears in the material master record; otherwise, it needs to be
entered. After all these entries have been made, the record is saved.
45. What is the document management system (DMS) in SAP?
The DMS in SAP helps you store external documents, such as pictures of the goods or material. By using
the DMS, you can set the maximum size of the picture that can be uploaded in a document. The DMS
helps to link these external documents with the appropriate SAP objects.
4. Procurement and Purchasing in sap mm
1. What are the special stocks used in MM?
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Special stocks are stocks that are managed separately regardless of whether they belong to your
company. The company manages a material by using a data record, which contains all the required
information. The different types of special stocks are as follows:
Sales order stock
Returnable packaging with customer
Consignment stock at customer
Vendor consignment stock
Returnable transport packaging
Subcontracting
Pipeline
2. What are the differences between company-owned special stocks and externally-owned special
stocks?
 The differences between company-owned special stocks and externally-owned special

stocks are listed in the following table:
Company-Owned Special Stocks Externally-Owned Special Stocks
Stocks that belong to the company but Stocks that belong to the wholesaler or
are stored with the wholesaler or the the customer but are stored at the
customer are called company-owned company are called externally-owned
special stocks. special stocks.
Company-owned special stocks are Externally-owned special stocks are

managed at the production level. managed at the place where they are
stored.
3. Why is negative stock needed in an organization?
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Organizations need negative stock when a material is shipped to a customer and production is not
confirmed or there is not enough stock to satisfy the requirement. The system still allows the issuing of
the material, and inventory shows a negative quantity of stock until the production of the material is
confirmed.
4. What are special procurement types?
In a normal purchasing system, the customer purchases the goods from the wholesaler/retailer and the
possession of the goods transfers from the wholesaler/retailer to the customer. This might not be the
case with special procurement types, where the transfer of goods may not necessarily be from the
wholesaler/retailer to the customer directly. For example, you might order a good for a friend of yours,
who, in turn, purchases the good from the wholesaler/retailer and then transfers the good to you. The
friend is the third party involved in this process. Therefore, the possession of the good indirectly
transfers to the customer. This type of procurement is called the special procurement type. The special
procurement type defines the external procurement or in-house production of the material. The
following list shows the special procurement types available in the SAP system:
 Consignment
 Subcontracting
 Stock transfer using the stock transport order (STO)
 Production in another plant
 Third-party processing
 Returnable transport packaging
 Pipeline handling
5. Define consignment stock. What are the main features of consignment stock?
Consignment, in a general sense, is the act of holding the ownership of materials but storing the
materials at some other premises until the materials are sold or shifted somewhere else. The stored
materials are known as consignment stock in the SAP system. Therefore, stock that is stored at the
customer's premises but is the supplier's property until the stock is transferred to the customer's stock
list is called the consignment stock. The main features of the consignment stock are as follows:
 You can combine the consignment stock with your available stock at any point in time.
 You can evaluate the consignment stock in any currency.
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 The price of the consignment stock fluctuates. This means that you can determine the price of the
consignment according to the market conditions.
 You can price the consignment stock in any unit.
 You can use different features of purchasing, such as discounts, in the consignment stock.
 The consignment stock is evaluated at a price quoted by different vendors.
6. How is the pricing of consignment stocks done? What information does consignment info record
contain?
 Prior to ordering a material from a vendor or posting a goods receipt to the consignment stock,
you need to obtain the consignment price. If the consignment material is ordered from several vendors,
the system maintains the consignment stock of each vendor separately. The reason the system
maintains the consignment stock separately is that the price of the consignment stock may vary from
one vendor to another.
 The consignment information (info) record contains the consignment price required for the
purpose of material valuation and accounting.
7. How are the consignment stocks created?
Consignment stocks are created in the normal purchase order (PO) or requisition, but the main thing to
consider is that you must enter the K category for the consignment item. As a result, the goods issued
are posted to consignment stores and the invoice receipt is not generated.
8. Define the consignment cycle?
 Consignment cycle is similar to the purchase cycle, except that when you create goods receipts of
the consignment stocks, only quantity (QTY) is updated and no accounting documents are created. Once
the goods are utilized, consignment is settled. The value of the consumed or issued consignment stocks
is taken from the active purchase info record.
9. How is consignment material procured?
Consignment material is procured through purchase requisitions, POs, and outline agreements.
10. How can we see the consignment stocks in SAP?
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You can see the consignment stocks in SAP by using the following functions:
 Display consignment info record
 Display the stock overview
 Display consignment stocks
11. How can we take consignment stocks into our own stock?
You can take consignment stocks from the vendor into your own stock by performing the following
steps:
 Select Goods Movement > Transfer Posting to display the initial screen.
 Enter the plant name and the location where you want to store the materials.
 Select Movement Type > Transfer Posting > Consignment > Consignment to Own.
 Select Continue to display the collective entry screen.
 Enter the name of the vendor, the materials, and the quantity of materials.
 Enter the receiving storage location if you want to store the materials in another storage location.
 Post the document. This makes the vendor liable to change the storage location of the materials.
12. Can we do the physical inventory check of consignment stocks?
Yes, you can do the physical inventory check of consignment stocks. To do the physical inventory check,
perform the following operations:
 Create a physical inventory document
 Enter the physical inventory count
 Post the inventory differences
13. How can you do invoicing in case of consignment stocks?
You can invoice in the case of consignment stocks by performing either of the following:
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 Invoice with PO
 Invoice without PO
14. What do you mean by subcontracting?
Subcontracting can be defined as the processing of materials by an external supplier.

15. How is subcontracting used in case of MM?
Subcontracting is the process by which the vendor receives the materials to produce the end product.
Subcontracting involves the following procedures:
 You order the end product by using the subcontract order. The components that the vendor
needs to manufacture the end product are mentioned in the PO.
 During the inventory management process, the components are posted to the stock of material
provided to the vendor. Later, the components are supplied to the vendor.
 The vendor then processes the service and delivers the materials ordered. The consumption of
the components is posted.
 If, after posting the goods receipt, the vendor notifies you that the quantity of the components
actually consumed is different than planned in the PO, you must make an adjustment.
 The vendor then charges for the service, for which the invoice is posted in Invoice verification.
16. What information does the subcontracting info records contain?
A subcontracting info record consists of ordering information related to subcontract orders. For
example, if you entered into a contract with an outside source for the assembly of a component, the
subcontracting info record would contain the price specified by the vendor for the assembly work.
17. How do we create subcontracting PO?
 Perform the following steps to create a subcontracting PO:
o Enter the material to order and the category of the item for subcontracting (L) in the order item.
o Press the Enter key to display the screen for component processing.
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o In the component processing screen, enter the components required by the vendor to manufacture
the ordered material (end product). When entering the components, you need to take care of the
following points:
o You do not need to enter the date required for the components. The system proposes this date
when you press the Enter key. It is calculated as follows:
 Delivery date of the item (planned delivery time)
o If you do not wish the quantity of the components to be altered, even if the order quantity of the
end product is changed, then set the indicated field to fixed quantity.
o If you want to allocate a particular batch of the component to the vendor for the manufacture of the
ordered material, enter the desired batch.
o To determine whether or not the components are available on the date required, select Component
List > Component Availability.
o When you enter a bill of material as the material in the subcontract order, the components are
automatically created.
o You can also determine the components in the bill of material at a later date (for example, if the bill
of material is subsequently changed) by selecting Item > Go to > Components > New BOM Explosion. The
existing entry of the components is removed and again determined in the bill of material.
o Save the PO.
 When you print the PO, the components are printed per order item.
18. How can we view the stocks provided to vendor?
The stocks of material provided to a vendor can be viewed by using the SC Stock Monitoring for Vendor
report. The report can be accessed by selecting Purchase Order > Reporting > SC Stocks per Vendor from
the menu. With this report, the current status of the stocks, planned issues, and planned receipts can be
viewed.
19. How are components (materials) provided to vendor?
The components, or rather the quantities of the components required to manufacture the end product,
are provided in the stock of material to be provided to the vendor. The stock of material provided to the
vendor is the total valuated stock that is available for MRP. The total valuated stock is managed at the
plant level, at the site of the vendor. This stock can be either an unrestricted-use or quality-inspection
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stock. The unrestricted-use stock refers to the valuated stock of a material that is owned by the
company and does not have any restrictions on its usage. The quality-inspection stock is intended to be
used only for quality inspection. The components can be provided to a vendor in the following ways:
 Posting the components from the unrestricted-use stock
 Receiving the components from another vendor
20. How are components consumed in case of subcontracting?
In subcontracting, the end product is ordered by using a subcontract order. The materials or
components required by the vendor to manufacture the end product are mentioned in the PO. The
components are posted to the stock of the material provided to the vendor during inventory
management. When the components are supplied to the vendor, the vendor manufactures the end
product and delivers it. At this point, the goods receipt is posted with a reference to the subcontract
order. The goods receipt also contains the posting of the consumption of the components from the
stock of material provided to the vendor. If the components consumed by the vendor are more or less
than that specified in the PO, an adjustment needs to be posted to correct the consumption of
components.
5. Inventory Management in SAP MM
1. Give an overview of Inventory management in SAP system?
Inventory management in the SAP system helps record and track stocks of materials. It also involves the
planning and documentation of all goods movements..
2. What tasks are covered under Inventory Management?
Inventory management is an important part of materials management (MM). Optimal inventory

management not only ensures an uninterrupted supply of the material at the required time, but also
prevents wasting items. MM covers the following tasks:
 Material stock management
 Planning, entry, and documentation of goods transfers from and to the inventory
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 Physical stocking of items
3. What is Physical Inventory?
 Physical inventory is a process in which all the transactions related to the movement of goods are
stopped and the company physically counts inventory. It is required in financial accounting rules or for
placing an accurate value on the inventory for tax purposes.
4. What are the initial configuration steps for physical inventory?
The steps for purchase acquisition are as follows:
 Defining the default values for the physical inventory document
 Reporting batch inputs
 Recording tolerances for physical inventory differences

 Inventory sampling as well as configuration of cycle counting
5. What is the difference between managing stock by quantity and managing stock by value?
 Transactions that make changes in the stock result in stock updates that are recorded in real time.
At any point in time one can view the stock overview, which represents the current situation at that
time. That is the essence of stock management by quantity, and can applied to the following stock types:
o Located in the warehouse
o Ordered but not yet received
o Located in the warehouse and reserved for a particular purpose
o Reserved for quality inspection
 The managing stock by value option reviews the stock materials qualitatively rather than
quantitatively. The valuatioNof stock is done either at the plant level or at the location level. Updates
that can be done when managing stock by value are as follows:
o The quantity and value for the goods movement
o The accounts that are assigned for cost accounting
o The G/L accounts for financial accounts, with automatic assignment of accounts
 The valuation area is the organizational level at which the stock value is maintained. It can be
either at plant level or storage level.
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6. What are the special stocks in SAP?
Special stocks are defined as stocks that must be managed separately by a company. They can be either
company owned or external stocks. They can be categorized as follows:
 Consignment
 Subcontracting
 Stock transfer using stock transport order
 Third-party processing
 Returnable transport packaging
 Pipeline handling
 Sales-order stock
 Project stock
7. With which modules in SAP is the inventory management integrated?
Inventory management is an important part of the SAP MM module. The business activities of an
organization revolve around the inventory of materials, which serves as the input for the manufacturing
process or the inventory of prepared goods for delivery or sale. The material is purchased from the
appropriate vendors on the basis of requests from the materials requirement planning (MRP) module.
The delivered items are recorded as the goods receipt in inventory management. The materials are then
stored, either for delivery to the customer or for manufacturing processes. Inventory management is
integrated with other modules, such as financial accounting (FI), sales and distribution (SD), production
planning (PP), project system (PS), and quality management (QM).
8. How is the inventory management integrated with MM?
 Inventory management is directly linked with the MM module because any movement of goods to
and from inventory happens under the MM module. MRP, purchasing, and invoice verification are some
of the MM components that are also linked with inventory management. After material is ordered it is
posted as a goods receipt with reference to the purchase order. The actual data of the quantities are
checked in the vendor's invoice.
9. What are the initial configuration steps for inventory management?
The steps for inventory management are as follows:
 Defining plant parameters
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 Defining system message attributes
 Defining number assignment
 Defining goods issue, transfer posting, screen layout
 Maintaining copy rules for reference documents
 Setting up dynamic availability checks
 Confirming the negative items
10. What is Goods movement? What type of documents is created after goods movement?
Goods movement refers to the movement of stock. This movement of stock could be either inbound
from the vendor, outbound to a customer, between different plants, or even between different stocks
within a plant. After goods movement, the SAP system creates two types of documents: material
documents and accounting documents.
11. What are the goods movements that take place in MM?
The goods movements can be defined as the physical or logical movements of materials that lead to a
change in stock levels or results in material consumption. The goods movements are part of the MM
policy. The goods movements in SAP are as follows:
o Goods receipt— Represents the physical movement of goods or materials into the company. It
increases the stock quantity. The goods receipt can be of the following types:
 Goods receipt with reference to a purchase order
 Goods receipt with reference to a Production order
 Goods receipt without reference

o Goods issue— Represents the physical movement of goods or material ouTof the company. It
reduces the stock quantity. The goods issue can be of the following types:
 Goods consumption in the company
 Goods delivery to customers
o Stock transfer— Represents the movement of materials from one location to another location. The
locations can be either within the same plant or different plants.
o Transfer posting— Represents the stock transfer that can either be physical or logical. In logical stock
transfers, goods are transferred only in records, while the actual stock transfer does noToccur. Some
examples of physical stock transfer are:
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 Stock transfer between two storage locations in a plant
 Stock transfer between two plants
 Transfer of materials to customer consignment stock
 Some examples of logical stock transfer are:
o Release of materials from stock in quality inspection
o Transfer of materials from vendor consignment stock to own stock
o Batch splitting
o Transfer posting material-to-material
12. What is Goods Receipt & Goods Issue?
 Goods receipt is the process that enables the receipt of material from a vendor or from the in-
house production process. There are other types of goods receipts in SAP that include initial stock
creation. The goods receipt process also increases stock due to one of the following processes:
o Receipt of production order
o Receipt of purchase order
o Initial inventory entry
o Others
 Goods issue is a process in which the stock in the warehouse is reduced due to any of the
following reasons:
o Shipment to a customer
o Stock withdrawal for a production order
o Return of materials
o Material required for sampling
o Scrapping of materials
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13. Why is goods receipt important to a company?
Goods receipt indicates a receipt or inward movement of stock of materials or goods. When an external
vendor provides stock to the company, the goods receipt is generated as a purchase order, and when
the material is produced in-house, the goods receipt is generated as a production order. A goods receipt
is important to a company because using a goods receipt moves material into stock, updates the stock
levels, and thereby indirectly enables the production process.
14. How is a goods receipt performed?
 The steps to perform a goods receipt are as follows:
o Enter the header data.
o Select the movement type and the purchase order number.
 The document is posted in the database.
15. How do you post the goods if the PO number is not known?
If the purchase order number is not known, you must enter search criteria for the purchase order in the
initial screen. As a result, the list of purchase orders is displayed. The desired purchase order items can
then be copied.
16. How is the vendor returned processed without a purchase order reference?
 You first need to observe the Return column and then select Item Detail > MIGO_GR > Goods
Receipt for Purchase Order. If the intention is to deduct the stock, then movement type 161 is used;
otherwise, 162 is used to undo the changes. Lastly, you must ensure that the document is a return
purchase order. The document is then saved.
 Alternatively, you can use the M21N transaction code for this purpose.
17. What happens when a goods receipt is posted?
While posting a goods receipt, the following events occur:
 The material document is created.
 The accounting document is created.
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 Three printed versions of goods receipt notes are modified.
 The stock level changes.
18. What is the result of goods movement?

The following events are initiated when goods movements take place:
 First, a materials document is generated, which is proof of the goods movements.
 Accounting documents are generated if the movement of goods requires a change in the financial
accounts.
 The stocks of the materials quantities are updated.
 The stock values in the material master are updated.
 Financial and material documents are updated.
How to use Negative Stocks and its purpose
Please advise me, how to use negative stocks. Mainly for what purpose this concept is used.
What settings are required to do for mainaining negative stock.

Negative stocks can be utilized for a number of different business scenarios, for instance:
1. If a material shipment is going to a customer, but the production has not yet confirmed (and there is
not enough stock on hand to satisfy the requirement), instead of getting the "deficit of stock..." message
when doing the issue for the delivery, the system will allow you to issue the material, and your inventory
will show a negative quantity until the production confirmation is
performed.
2. I had a client who used this functionality to track component usage for their subcontractors. They
would confirm production for an entire month for the FERT materials produced by the subcontractor.
Starting the month with zero stock for all components, then at the end of the month the value of the
component stock (disregarding the negative sign) would be deducted from the amount they owed for
the services performed. In this agreement, the components were "sold" to the subcontractor but no
invoicing ever took place for the components. Just a word of caution ...negative stocks/values for
materials can raise many questions for accounting purposes at the end of fiscal periods.

There have been several reasons for using the negative stock functionality subject to the specific
business requirements of your industry. For us, we have decided to use this negative stock feature due
to the following reasons:
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1) Sales of finished products to customers. We are cement producer and in an effort to avoid any delay
in selling our products to our customers, we determined to allow negative stock posting since it is of our
cement industry that cement after being packed will be delivered directly to our customers ie. no
temporary storage is required.
2) The alignment of inventory/stock movement with production process where due to some reason, the
reception of raw materials and/or consumables was not maintained on time resulting in interruption of
process order confirmation.

Can someone tell me what is the effect of negative stocks in material valuation, ie. moving average?
As you know negative stock will have negative value, which will have direct impact to financials. Say
you have a material of Qty 10 Each, total worth $ 10.00 in stock and since you enabled negative stock in
system ( valuation area level and plant- storage location level ) if you try to issue stock of say 20 Eaches,
system will show stock of negative 10 and value $-10.00.
After that if you try to do goods receipt of say 20 eaches, of total value 20.00 material will have original
status as you started. But if the value is different say 25.00, then moving average will be arrived from
$15.

Why my stock is having negative stock value. The stock qty is 0. When I want to do GR, the system issue
and error message saying my stock is negative. How can I do bypass it.
My assumption was that you are using MAP (Moving Average Price) Price Control for your material and
that there was a price difference between IR value and GR value where IR value < PO value. In this case,
the price difference will be credited to your stock and since the price difference value is in excess of your
current stock value, this negative value took place.
What is Stochastic Block?
Stochastic Block
You can block invoices at random to check them again. If the stochastic block is active and you post an
invoice that is not subject to any other blocking reason, it can be randomly selected for blocking.
A stochastic block is not set at item level, but for the whole invoice. If a stochastic block is set when you
post the invoice, the system automatically sets an R in the field Payment block in the document header
data; there is no blocking indicator in the individual items.
In Customizing for Invoice Verification, you can define:
==If stochastic blocking is active==

The degree of probability of a block. You set a threshold value and a percentage for this.
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- If the value of the invoice is larger than or the same as the threshold value, the degree of probability
that the invoice will be blocked is that of the percentage.
- If the value of the invoice is smaller than the threshold value, the degree of probability that the invoice
will be blocked is calculated proportionally to the percentage.
If, for example, the threshold value is $100 and the percentage 50%, every invoice over $100 would
have a 50% chance of being blocked; an invoice for $500 would have a 25% change of being blocked. If
you want the degree of probability to be the same for all invoices, you set the threshold value to zero.
If you enter a threshold value of zero and a percentage of 99.9%, all invoices would then be blocked.
GR/IR Clearance Account in SAP system
GI/IR clearing account is value based or quantity based?
Please find details for the GR/IR Clearance account in SAP system:
GR/IR Clearing Account Maintenance
Quantity differences between goods receipt and invoice receipt for a purchase order result in a balance
on the GR/IR clearing account.
- If the quantity invoiced is larger than the quantity received, the system then expects further goods
receipts for this purchase order to clear the balance.
- If the quantity received is larger than the quantity invoiced, the system then expects further invoices
for this purchase order to clear the balance.
You can also clear differences for delivery costs. If no more goods or invoices are to be received, you
must clear the balance manually. This can be done in different ways:
- You can return the extra goods to the vendor.
- You can cancel the invoice and post a corrected invoice or a credit memo for the surplus posted
quantity.
- You can clear the GR/IR clearing account manually.
Maintaining the GR/IR Clearing Account
The GR/IR clearing account is usually cleared at the end of a period or fiscal year for that order items
that no further goods receipts or invoices are expected for.
1. Choose Logistics -> Materials Management -> Logistics Invoice Verification -> GR/IR Account
Maintenance -> Maintain GR/IR Clearing Account.
The GR/IR Account Maintenance screen appears.
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2. Enter data as required on this screen in the Document header data frame.
3. In the Selection frame, you choose various selection criteria for the transactions for which you want
to post the differences are available for the following selection fields. You maintain them in the user
master.
4. Choose the processing type:

- Automatic clearance
- The Automatic clearance function is intended for processing in the background.
Choose Program -> Execute in background.
- Prepare list
- Choose Execute.
- The selection screen appears.
5. On the selection screen, the individual purchase order items that have quantity variances and match
your selection are now listed. Select the order items that you want to clear.
6. Clear the GR/IR clearing account for the selected purchase orders by choosing List -> Post clearing.
Account Maintenance Document
Document that displays the quantities of the debit or credit of a material in GR/IR clearing account
maintenance.
If you clear quantity differences between the goods receipt and invoice receipt for a purchase order
using account maintenance, the system produces an account maintenance document.
You can branch from the account maintenance document to the following accounting documents,
assuming that they exist:
- Accounting document
- Profit center document
- Special ledger document
- Material ledger document
Standard vs Moving Average Price
Generally all raw materials (ROH), spare parts (ERSA), traded goods (HAWA) etc. are assigned as moving
average price (MAP) because of the accounting practice of accurately valuating the inventory of such
materials. These materials are subject to the purchase price fluctuations on a regular basis.
Company generally use moving average on purchased materials with small cost fluctuations. It is most
appropriate when the item is easily obtainable. The impact on margins are minimized which reduces
the need for variance analysis. Furthermore, the administrative effort is low as there are no cost
estimates to maintain. The cost reflects variances, which are closer to actual costs.
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The semi-finished goods (HALB) and finished products (FERT) are valuated with standard price because
of the product costing angle. If these were to be MAP controlled, then finished/semi-finished product
valuation would fluctuate due to data entry errors during backflushing of material and labour,
production inefficiencies (higher cost) or efficiencies (lower cost). This is not a standard accounting and
costing practice.
Refer to OSS note 81682 - Pr.Contr.V for semi-finished and finished products.

SAP recommends that standard price to be used for FERT and HALB. If actual price is required for
valuation, make used of the functions of material ledger where a periodic actual price is created which is
more realistic.
e.g. how SAP calcualte the moving average price

Goods Receipt for Purchase Order
Balance on hand quantity + Goods Receipts quantity
Balance on hand value + Goods Receipts value
New Moving Average Price = Total Value / Total Quantity
Invoice Receipt for Purchase Order

Invoice price more than Purchase Order price
additional value add to Balance on hand value then divided by Balance on hand quantity
Invoice price less than Purchase Order price
difference is deducted from the Balance on hand value (up to 0). The rest of the amount will becomes
price variance. This will result in Balance on hand value is zero while there are Balance on hand
quantity. If the Balance on hand value is enough to deduct, then the remaining value will be divided by
Balance on hand quantity.
When your Goods Issue price is constantly greater than your Goods Receipt price, it will result into zero
value moving average price.
OSS note
185961 - Moving Average Price Calculation.
88320 - Strong variances when creating moving average price.
Never allow negative stocks for materials carried at the moving average.
Configure the system message for Inventory Management.
For every system message that appear, SAP allows you to control the response of the message.
If you want to prevent the user from further entry for a particular message, you can change it to
message category
E - Error.
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W - Warning re-confirms the entry. The user have to hit the enter key again to confirm the entry.
Message Category
- No message
W - Warning
E - Error message
Transaction
OMCQ - M7 Inventory Managment and Physical Inventory
OME0
06 Purchasing document
SE External services : master data : service item
ME Purchasing : general messages
An Example of using System Message
Problem in Purchasing documents
1) I had a problem while creating a P.O (Doc.type RO) referring the contract. The contract is a (WK)
doc.type,value mentioned for 1 lakh, When I make a P.O referring the contract, I put Qty of items and
Price in such a way by calculating, it exceeds the contract value,and the P.O gets posts and document is
generated.
The sytem should not allow the P.O to post, when the contract value is exceeding, I am unable to
understand where I have gone wrong.
2) The Purchase Requistion (Any Doc.type) is made and released.Immediately for checking point of view
I cancel the release and do some changes and again tried to release the same It is not getting into
release strategy.
Plesae help me out to get rid of above said problems.
----------------------
The answer to your first problem is as follows:
You need to go into config (IMG): Materials Management -> Purchasing -> Environment Data -> Define
Attributes of System Messages.
Double click on "System Messages".
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Find the message that corresponds to your problem: (e.g. Target value of contract & exceeded by & &)
or (Target quantity exceeded by & &). In the column on the right side headed CAT set this to "E" for
ERROR.
If you do this then when the target value or target quantity is exceeded an error message will appear.
The system will then NOT allow you to exceed these quantities. Likewise if you only want to WARN the
user that the value/quantity is being exceeded then set this to a W for warning.
Configuring the Stock Transport Order
While I am doing Stock transport order I am getting the following error:
"Not possible to determine shipping data for material 4500012"
I have maintained the material 4500012 in both the plants.

I am not quite sure to what you are trying to say but the cross company Stock Transport Orders can be
done by:
- Configure using transaction OMGN

- Depending upon the sending and receiving plants, maintain sales organization and customer data in
customizing.
- Maintain the supplying plant as a vendor and attach the plant to the vendor in the Vendor Master.
- Material type has to be HALB or HAWA.
- Ensure that the company with sales Organization has a plant to take care of stocking.
- The PO used is NB and not Stock Transfer PO.
Configure SD for inter-company billing to enable picking up the pricing procedure for billing.
- Carry Out delivery through process delivery due list and billing through process billing due list.
Otherwise, You need to configure your Stock Transport Order settings for your Cross-Company:
Business Transaction to work.

1. Customer No. for the Goods Receiving Plant - OMGN
2. Availability Check- Checking Rule (if necessary) - OMGN
3. Assign a Delivery Type for the Delivering Plant - OMGN (for Stock Transport Orders, NLCC)
4. PO type (which i belive you have done) - OMGN
5. Assign Vendor No. to the Supplying Plant (done) - VK02
6. Assign Customer No. to the Purchasing Plant for the Inter-Compnay Invoice (but you need to assign
this to the Sales Organization pre-assigned to the Purchasing Plant),
IMG-SD-Billing-InterCompany Billing-Define Internal Customer No. by Sales Org
***and by the way for the Invoice to work between Cross-Compnay Plants, you need also to have a
Sales Org for the Supplying Plant and a Pricing Determination Procedure.
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I am trying to create a Stock Transport Order (STO) with document type UB and item category U. My
objective is to transfer material from Plant (supplying plant) 100 to Plant (receiving plant) 1100 within
one company code (1000) with STO.

For this purpose I created a raw material 1434 in plant 1000 with sales org 1 view and in that view
entered in delivering plant field 1000 as delivery plant. After that I extended material 1434 to plant 1100
without changing anything what I did while creating the material first in Plant 1000 except in
organizational level I entered 1100 in the plant field. I entered Sales org 1000 and distribution channel
10 in organization level for both plant while creating and extending the material. In me21n I chose Stock
Transport Order with document type UB and item category as U also receiving Plant as 1100. With this
when I tried to save the STO the message, I am getting an error, Cannot determine shipping data for the
material 1434?
I am doing solely mm function why I need to create Customer master? In this case plant 1100 is the
customer right?
Solution:
1. Mat.(1434) should be maintained in both the plants. (1000&1100).
2. Should have enough stock in supplying plant(1000).
3. Make its supplying plant as a vendor in vendor master record in receiving plant(1100).
4. Make it receiving plant as a customer in customization.

Create customer (xd01) & and define the shipping data for plants in both the plants.
Path: spro – img – m.mgmt – purchasing – po – set up STO – define shipping data (1 by1 )
In Receiving plant (1100) In Supplying plant (1000)
Customer num. 123345 (for ex.) Customer num. --------- (don't fill)
Sales org.yyy
Dist. Channel
Sales div. y

5. Assign doc. Type is "NL" for intra company STO. If STO is inter company, Assign doc. Type is "NLCC".
Position doc type is "UB"
Enter supplying plant(1000) & doc type (NL) & checking rule (ex:01)
6. Assign doc. Type is "UB" to u'r plants.(PO)

Go for new entries
Enter supplying plant(1000) & Receiving plant (1100) & doc type (UB).
7. Create a PO, choose the doc type is `UB' & item cat.'U', Enter supplying plant as a vendor in PO of the
receiving plant(1100).
8. Provide this num (PO) to SD people, they will do the delivery by using transactional code is VL10B.
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9. Sales people they will provide "out bound delivery num".
10. Do the GR. In GR the second tab 05 out bound delivery instead of PO mov.type 101.
11. See the stock over view in the receiving & supplying plants.
What is the process flow and tcodes to do stock transferring?
We have one company code (1500) in SAP and four (4) plants ( 1511,1521,1512, 1541 ) under 1500.
Now, I have to transfer one material from 1511 to 1521 & from 1521 to I have to sell the same. 1521 is
trading plant.
You can use the process - stock transfer from one plant to another plant it depends on only mvt types.
Single step or 2 step movements.
Pls. note the following procesure for stock transfer & Sale : 1511 to 1521 kindly make the STN from plant
1511 to 1521 with following steps:
Step for STN Creation :

ME21N - Create Stock Transfer order (STO)
ME22N - Change STO
ME23N - Display STO VL10B
Create Delivery VL02N - Post goods issue & Batch / qty. picking
VF01 - Create Billing Documents ( STN )

VF02 - Display STN
VF03 - Printout for STN
After making the STN, pls. take the GRN in plant 1521 with T. code MIGO and then make the sales
invoice from plant 1521 with following T. Code.
VA01 - Create Sales Order

VA02 - Change Sales Order
VL10A - Create Delivery

VL02N - PGI ( Post goods issue )
VF01 - Document update

VF03 - Invoice printout.
Transfer Posting Plant (Unrestricted) to Plant (Blocked)
Step 1. Now Transfer stock from plant 1 to plant 2 with in the same Company code. Either with single
step procedure or with two step procedure.

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Before you do transfer stock from plant 1 to plant 2 first need to extend your material to plant 2.

Step 2. Procedure to extend material:

T.code MM01 enter your material XXXX enter "organizational levels " window will open there u select
your plant 2 (receiving plant) click on tick continue the msg will appear "The material already exists and
will be extended" enter require fields and save ( now your material is extended to plant 2)
Step 3: Single step procedure stock transfer from plant 1 to plant 2 T.code MB1B Mvt type is 301 enter
receiving plant is "plant 2" and material XXXXX and required sfields and save.

Step 4. Do stock type transfer from unrestricted to blocked stock T.code MB1B movt type is 344. for
plant 2

You can only do blocked stock to blocked stock transfer within a plant mvt type is 325.
Transferring Stocks Via Purchase Order
Please follow the following process as below:
1) Create the STO using T-Code:ME21N and maintain pricing conditions of freight and Save.
2. Create Delivery :VL10G

Click on the Background Button after selecting line item
A message is flashed : See log for information> next Click on Log for delivery creation Button >click on
line item>click on document button to get Delivery document No
3. Picking, PGI:VL02N
4. Billing:VF01
Save the document and its done
5. J1IIN - Outgoing Excise Invoice
6. MIGO - Goods Receipt against outbound Delivery
7. J1IEX - Capture & Post Excise Invoice
Inventory Posting Configuration
3.0x
Goods receipts for Purchase Order/Production Order
(You can define the screen layout by Movement Type using transaction OMCJ)
101 - Receipt for Purchase Order/Production Order
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122 - Return delivery to vendor
511 - Receipt of delivery without charge (Free of Charge)
Goods Issue
(You can define the screen layout by Movement Type using transaction OMBW)
201 - Consumption for cost center
261 - Consumption for production order - (confirmation automatic posting - known as backflushing in
SAP)
Material backflushed = ( Production Order Quantity + Scrap ) / BOM Base quantity * Component
quantity
Usually, material backflushed is done at the first operations. Subsequent operations does not have any
material backflushed, only activities cost.
Which operations to backflushed is set in your routing. (CA02) In the routing click the
button CompAlloc. Look at the column B and Oper. A tick under B indicate material backflushing.
Transfer posting
301 - Transfer from one Plant to another Plant (Single Step)
309 - Transfer posting Material to Material (or known as Material Conversion)
311 - Transfer from one Storage Location to another (Single Step)
MBST - Cancel/Reverse the Material Document
The cancel movement type usually is a plue one. e.g.
101 cancels movement type will be 102,
261 cancels movement type will be 262.
When you post a goods movement, the Valuation Class in the Material Master (accounting view)
determines which G/L accounts are updated when a transaction relevent to valuation take place.
OMWB - Create Automatic Postings
Click Account assignment
Double click on the Transaction Desciptions and you can see which valuation class is tie to which G/L
accounts.
OMJJ - Definition of New Movement Types. Allows you to control the movement type functions.
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The followings are some of the movement type control :-
Double click on the Transaction type to maintain the movement type control. e.g. print a material
document after the user click save.
Click on Short Text to maintain the movement type descriptions.
Click on the Allowed Transaction to maintain which movement type can be used in which transaction
code.
Inter Plant Purchasing (Plant A buys from Plant B)
Procedure Flow:-
Buying Plant Create the Purchase Order type UB - Stock transport Order - transaction ME27
Supplying Plant receive the Purchase Order and issue it to the transport warehouse once they have the
required quantity - transaction MB1B - movement type 351 - Transfer posting to stock in transit from
unrestricted use.
Buying Plant receive the purchase quantity with transaction MB01 - Goods Receipt from Purchase Order.
Accounting document was created during the transfer posting - movement type 351.
Debit Buying Plant Inventory

Credit Supplying Plant Inventory
If there was a price difference (the same material have different price in the different plant), the lower
price plant will be posted with the amount differences.
Example :-
Material Master - Costing View Material Price for Buying Plant 100
Material Price for Supplying Plant 150
The Accouting posting would be:-

Debit 12345 Buying Plant Inventory 100
Debit 67890 Price Difference for Stock Transfer 50
Credit 12345 Supplying Plant Inventory 150
The General Ledger Account Number was determine through the Material Valuation Class which was
tied throught the Automatic Posting of Account Assignment. (Transaction OMWB then click Account
Assignment)
Double click on the Description to check the General Ledger Account Number
Inventory posting BSX
Expense/revenue from stock transfer AUM
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Safety Stock Calculation in SAP
Let me try and explain to you through a mix of functional procedures and how SAP calculates the Safety
Stock:
In normal materials management there are basically 2 basic inventory management systems, the P
system and the Q system.
P system is a system wherein replenishment is done keeping the quantity constant. The period becomes
the variant. In other words you fix the quantity you want the stock to dip, to trigger a requirement. As
soon as the stock level is reached you replenish the stock. During a lean period the time taken to reach
the level will be longer and during an active period the time taken to reach that stock could drop.This
normally relates with your consumption based planning.
Q system is a system wherein replenishment is done keeping the period constant. The quantity becomes
the variant. In other words you will check for the level of stock at fixed time intervals (daily, weekly,
monthly etc.) compare it with the requirements on that day and trigger the procurement process for
replenishment.This normally relates with your MRP.
Now there are 4 more factors that could affect the idealistic procurement pattern:
1. Ordering Lead-time.
2. Manufacuring Lead-time
3. Transporting Lead-time
4. Stock conversion Lead-time (or Quality Inspection lead time)
A delay in any or all of the above can have effect on the entire replenishment process and the stock. A
buffer stock must be designed to take into account the above coverage. Again the determination of your
safety stock depends on the accuracy of your forecast. Higher your accuracy, lower your safety stock.
This relationship between forecast accuracy and service level
is denoted by factor R. This also takes into account that the customer demand cannot be always satisfied
100% of the time.
Hence what we have is:

R = Relationship between forecast accuracy and service level (Service Factor)
W = Delivery time (in days) / Forecast Period (in days)
MAD = Mean absolute deviation (parameter for forecast accuracy)
Now If replenishment lead time is greater than the forecast period by factor W then:
Safety Stock = R x Sq.rt. W x MAD
Else
Safety Stock = R x W x MAD
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Now in SAP If the material is produced in-house, the delivery time is: opening period + in-house
production time + goods receipt processing time. It is expressed in workdays. The forecast period is
taken from the material master record and is also expressed in workdays.
If the material is procured externally, the delivery time is: Processing time for purchasing + planned
delivery time + goods receipt processing time. It is expressed in calendar days. The forecast period is
taken from the material master record and is also expressed in calendar days.
As a result of this you will have observed now that the safety stock must cover both the unplanned
material excess consumption, as well as the additional requirements caused by delayed deliveries.
In SAP you can specify a minimum safety stock. If the result of the safety stock calulation by the system
is lower than this limit, the safety stock is automatically set to this value. You enter the minimum safety
stock in the material master record (MRP 2 screen).
Safety Stock:
In IMG -> Materials Management -> consumption Based Planning -> Master Data -> Check MRP Types
(transaction code OMDQ) you use the indicator Calculate Safety Stock so that system calculates the
safety stock automatically.
The safety stock can be calculated automatically for materials planned with one of the consumption-
based planning procedures if:
1. The service level has been maintained in the material master record.
2. Historical data exists
3. The forecast has been carried out for the material.
Dynamic Safety Stock:
If the option Define Range of coverage profiles is chosen in IMG (Tr.Code OM1A) you can determine a
safety stock level that takes into account:
1. Requirements.
2. Range of coverage
The limiting factors to the above are:
1. Maximum and minimum range of coverage ( defined period , that is month, week or PPC planning
calendar)
2. Determination of various periods for the validity of the range of coverage.
The system uses the formula:
Dynamic safety stock = average daily requirements (ADR) x Range of coverage
ADR = Requirements in the specific period / number of days in the total period length (defined period x
standard days)
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Please note here that if you carry out the planning run even in the middle of the month the system will
include even the requirements planned at the beginning of the month.
Please also note that you can determine the range of coverage for a maximum of 3 periods.
1. Range of Coverage in the First Period

2. Range of Coverage in the second period
3. Range of coverage on the rest of the horizon
However you have the option of maintaining different coverage for each of these periods.
Based on your customization the system determines the number of days used for calculating your
average daily requirement
Minimum Stock Level (mSL) = ADR x minimum range of coverage

Target Stock Level (Dynamic Safety Stock this is DSL) = ADR x Target range of coverage.
Maximum Stock Level (MSL) = ADR x maximum range of coverage.
Having confirmed the above, I will now try and explain through an example how the system calculates
the Dynamic safety stock:
Presume that the system has determined the ADR as 25 Kgs for a material.
You have set the following in customizing:
Minimum Range of coverage = 2 days

Target Range of coverage = 6 days
Maximum Range of coverage = 10 days
Now the System determines the following;
mSL = 2*25 = 50 KGs

DSL = 6*25 = 150 KGs
MSL = 10*25 = 250 KGs
This is what happens for various levels of stock
Case 1:
Stock = 45 Kgs
System Activity = DSL - stock
Procurement Proposal = 105 Kgs
Case 2:
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Stock = 60 Kgs
System Activity = DSL - stock
Procurement Proposal = 90 Kgs
Case 3:
Stock = 155 Kgs

System Activity = none
Procurement Proposal = none
Case 4:
Stock = 255 Kgs
System Activity = System checks whether the procurement proposal is firmed and if yes it displays an
exception message.
Also note that in the case of Time Phased materials planning The range of coverage is calculated
differently.
Re-open Period closing
Suppose by mistake you closed the period and want to reopen it.
Use transaction code MMPI.
Enter the period you want to open sequentially. For e.g. the current period is 10, and you want to be
open for the 7th one, then you have to open period like 9th, 8th and 7th. After making the correction
you have to closed the period again sequentially.
There are no major-minor impact on the system, but it is better to do this once only. Regular practice
for this transaction may be harmful.
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Problem is that after goods receipt and AFTER invoice verification, reversal of goods receipt is being

Here remove the tick against Mvt 102 & 122.

You can block a vendor at the following levels:

All company code

Where to Get the Goods Movement Type List?

Step 1) Run spro command/TC

Where the schedule margin key is customized?

What is the function of OBYC?

Tell me what is *make to order*?

Make-to-order production is a process in which a product is individually manufactured for a particular

How to delete a material completely?

Contact ABAP or BASIS person to resolve this.

How to create new transaction codes?

What are the types of special stocks available?

What are the steps in automatic account assignment configuration?

Define Valuation Classes. (OMSK)

Group Together Valuation Areas (OMWD)

creens in Material Master

Various Material Master Screen:

MM06 - Flag for deletion.

MM04 - Display the changes done to the material master.

OMSR - Assign the field to the field group

OMS9 - Maintain the data screen field

Goods Receipt for Purchase Orders

Transfer from Plant to Plant

Common configuration changes-

Define new material group (OMSF)

Define new valuation class (OMSK) and automatic posting (OBYC)

Define new material account assignment group (transaction OVK5) and

Customer/Material/Account keys (transaction VKOA)

Just follow below as it is.

COMPANY RELIANCE -9001

COMPANY CODE -8001

COMPANY RELIANCE -9001

COMPANY CODE -8001

COMPANY RELIANCE -9001

COMPANY CODE -8001

Path to create COMPANY:

How to maintain automatic determination of G/L accounts during GR/GI/Transfer posting?

What is the difference between selection parameter WE101 and WE103?

There are 3 t-codes by which you can create vendor:

PRICE DETERMINATION PROCESS or PRICING PROCEDURE

CONDITIONS OR PRICING PROCEDURE or PRICE DETERMINATION PROCESS

Pricing Procedure (PP)

Difference between PB00 & PBXX

Schema Group Vendor

Schema Group Purchasing Organization

ITEM CATEGORY (I)

Physical Inventory and Inventory Management

Transfer Posting Stock to Stock

Transfer Posting from Plant to Plant

Transfer Posting B/W Storage Location to Storage Location

When invoice document is posted in the system

SPECIAL STOCKS & SPECIAL PROCUREMENT TYPES

Different types are of Special Stocks are as follows

Steps to perform subcontracting:

1. Create subcontracting inforecord (Optional)

CONSIGNMENT: - (No Concept of Invoice)

PIPELINE PROCESS: (No Concept of Invoice)

RETURNABLE TRANSPORT PACKAGING (RTP):

This scenario is under one company code between two plants.

• ASAP: - Accelerated System Application Product in Data Processing.

• Business Blue Print (BPP): -

Tell me what is make to order?

�� ASAP: - Accelerated System Application Product in Data Processing.

�� Business Blue Print (BPP): -