Materials Management with SAP ERP: Functionality and Technical Configuration

Get the most out of your Materials Management implementation with this updated, comprehensive guide to configuration and functionality. You'll learn the ins and outs of Materials Management in SAP, from goods receipt and invoice verification to early warning systems and special procurement types. Dive into master data and other configuration tasks to ensure your MM system is optimized for your logistics needs!Highlights include:-Materials master data-Vendor master data-Purchasing information data-Batch management-External Services Management-Material requirements planning (MRP)-Inventory management-Goods issue/goods receipt (GI/GR)-Material Ledger-Balance sheet valuation-Invoice verification-Document management Highlights: Materials master dataVendor master dataPurchasing information dataBatch managementExternal Services ManagementMaterial requirements planning (MRP)Inventory managementGoods issue/goods receipt (GI/GR)Material LedgerBalance sheet valuationInvoice verificationDocument management

A native of London, England, Martin Murray joined the computer industry upon his graduation from Middlesex University in 1986. In 1991, he began working with SAP R/2 in the Materials Management area for a London-based multi-national beverage company. In 1994, he moved to the United States to work as an SAP R/3 consultant. Since then, he's been implementing the Materials Management (MM) and Warehouse Management (WM) functionality in projects throughout the world. He works for IBM Global Business Services. Martin is the author of six best-selling books from SAP PRESS: Materials Management with SAP ERP, Warehouse Management with SAP ERP, Discover Logistics with SAP ERP, Maximize Your Warehouse Operations with SAP ERP, Understanding the SAP Logistics Information System, and SAP Transaction Codes: Your Quick Reference to T-Codes in SAP ERP.

1.1 ... Materials Management as a Part of SAP ERP ... 37 1.2 ... Materials Management as Part of Logistics ... 39 1.3 ... Materials Management Integration ... 41 1.4 ... Summary ... 43 2.1 ... Client Structure ... 45 2.2 ... Company Code ... 49 2.3 ... Plants ... 51 2.4 ... Storage Locations ... 55 2.5 ... Warehouse and Storage Types ... 58 2.6 ... Purchasing Organization ... 60 2.8 ... Summary ... 67 3.1 ... Material Master ... 69 3.2 ... Vendor Master ... 75 3.3 ... Purchasing Information Data ... 80 3.4 ... Batch Management Data ... 83 3.5 ... Serial Number Data ... 86 3.6 ... Business Examples: Master Data in Materials Management ... 89 3.7 ... Summary ... 93 4.1 ... Industry Sector ... 96 4.2 ... Material Type ... 96 4.3 ... Basic Data ... 103 4.4 ... Classification Data ... 114 4.5 ... Purchasing Data ... 116 4.6 ... Forecasting Data ... 128 4.7 ... Work Scheduling Data ... 133 4.8 ... Sales Organizational Data ... 138 4.9 ... Sales General Data ... 144 4.10 ... Business Examples: Material Master Data ... 147 4.11 ... Summary ... 151 5.1 ... Production Resources/Tools (PRT) Data ... 153 5.2 ... Plant Data/Storage Location ... 156 5.3 ... Warehouse Management Data ... 162 5.4 ... Quality Management Data ... 168 5.5 ... Material Requirements Planning Data ... 172 5.6 ... Accounting Data ... 191 5.7 ... Costing Data ... 197 5.8 ... Business Examples: Material Master Data ... 201 5.9 ... Summary ... 205 6.1 ... General Data ... 207 6.2 ... Accounting Information ... 218 6.3 ... Purchasing Data ... 229 6.4 ... Business Examples: Vendor Master Data ... 239 6.5 ... Summary ... 241 7.1 ... Purchasing General Data ... 243 7.2 ... Purchasing Organization Data ... 247 7.3 ... Business Examples: Purchasing Information Data ... 255 7.4 ... Summary ... 256 8.1 ... Batch Management Overview ... 259 8.2 ... Batch Master Record ... 262 8.3 ... Batch Determination ... 270 8.4 ... Batch Information Cockpit ... 274 8.5 ... Business Examples: Batch Management Data ... 278 8.6 ... Summary ... 280 9.1 ... Creating a Material Master Record ... 281 9.2 ... Changing a Material Master Record ... 282 9.3 ... Material Master Deletion ... 286 9.4 ... Loading Material Master Records ... 290 9.5 ... Production Versions ... 292 9.6 ... Revision Levels ... 296 9.7 ... Business Examples: Material Master Record ... 297 9.8 ... Summary ... 300 10.1 ... Creating the Vendor Master Record ... 301 10.2 ... Changing the Vendor Master Record ... 305 10.3 ... Deleting Vendor Master Record ... 308 10.4 ... Display Vendor Master Record ... 310 10.5 ... Blocking Vendors ... 312 10.6 ... One-Time Vendor ... 313 10.7 ... Vendor Subrange Functionality ... 314 10.8 ... Business Examples: Vendor Master ... 315 10.9 ... Summary ... 318 11.1 ... Purchase Requisition ... 319 11.2 ... Request for Quotation ... 320 11.3 ... Quotation ... 322 11.4 ... Purchase Order ... 323 11.5 ... Source List and Source Determination ... 324 11.6 ... Conditions in Purchasing ... 330 11.7 ... Vendor Evaluation ... 333 11.8 ... Quota Arrangement ... 340 11.9 ... Business Examples: Purchasing ... 341 11.10 ... Summary ... 344 12.1 ... Indirectly Created Requisition ... 345 12.2 ... Directly Created Requisition ... 347 12.3 ... Processing a Purchase Requisition ... 354 12.4 ... Business Examples: Purchase Requisitions ... 359 12.5 ... Summary ... 361 13.1 ... Creating a Request for Quotation ... 363 13.2 ... Changing a Request for Quotation ... 372 13.3 ... Releasing a Request for Quotation ... 374 13.4 ... Issuing a Request for Quotation to a Vendor ... 376 13.5 ... Business Examples: Request for Quotation ... 377 13.6 ... Summary ... 379 14.1 ... Entering a Quotation ... 381 14.2 ... Comparing Quotations ... 383 14.3 ... Rejecting Quotations ... 387 14.4 ... Business Examples: Quotations ... 389 14.5 ... Summary ... 390 15.1 ... Create a Purchase Order ... 391 15.2 ... Maintaining a Purchase Order ... 395 15.3 ... Blocking and Canceling a Purchase Order ... 395 15.4 ... Account Assignment in a Purchase Order ... 397 15.5 ... Outline Purchase Agreement ... 401 15.6 ... Scheduling Agreement ... 401 15.7 ... Contracts ... 405 15.8 ... Vendor Confirmation ... 409 15.9 ... Messages and Outputs ... 414 15.10 ... Pricing Procedures ... 417 15.11 ... Reporting ... 424 15.12 ... Release Procedures ... 425 15.13 ... Business Examples: Purchase Orders ... 429 15.14 ... Summary ... 432 16.1 ... Service Master Record ... 433 16.2 ... Standard Service Catalog ... 437 16.3 ... Conditions in External Services Management ... 438 16.4 ... Procurement of Services ... 440 16.5 ... Entry of Services ... 443 16.6 ... Blanket Purchase Order ... 444 16.7 ... Business Examples: External Services Management ... 445 16.8 ... Summary ... 448 17.1 ... Master Data in Consumption-Based Planning ... 449 17.2 ... Planning Process ... 452 17.3 ... Planning Evaluation ... 455 17.4 ... Procurement Proposal ... 456 17.5 ... Implementing the Material Requirements Planning Area ... 457 17.6 ... Business Examples: Consumption-Based Planning ... 458 17.7 ... Summary ... 460 18.1 ... Reorder-Point Planning ... 461 18.2 ... Forecast-Based Planning ... 463 18.3 ... Time-Phased Planning ... 464 18.4 ... Business Examples: Material Requirements Planning ... 467 18.5 ... Summary ... 469 19.1 ... Forecast Models ... 471 19.2 ... Forecast Parameters ... 473 19.3 ... Forecast Options ... 478 19.4 ... Business Examples: Forecasting ... 480 19.5 ... Summary ... 482 20.1 ... Goods Movements ... 485 20.2 ... Goods Issue ... 489 20.3 ... Goods Receipt ... 490 20.4 ... Physical Inventory ... 490 20.5 ... Returns ... 491 20.6 ... Reservations ... 496 20.7 ... Stock Transfers ... 502 20.8 ... Business Examples: Inventory Management ... 509 20.9 ... Summary ... 511 21.1 ... Goods Issue to a Production Order ... 513 21.2 ... Goods Issue to Scrap ... 519 21.3 ... Goods Issue for Sampling ... 521 21.4 ... Goods Issue Posting ... 522 21.5 ... Goods Issue Reversal ... 524 21.6 ... Business Examples: Goods Issue ... 525 21.7 ... Summary ... 527 22.1 ... Goods Receipt for a Purchase Order ... 529 22.2 ... Goods Receipt for a Production Order ... 534 22.3 ... Initial Entry of Inventory ... 536 22.4 ... Other Goods Receipts ... 537 22.5 ... Business Examples: Goods Receipts ... 541 22.6 ... Summary ... 543 23.1 ... Physical Inventory Preparation ... 545 23.2 ... Counting and Recounts ... 550 23.3 ... Physical Inventory Posting ... 554 23.4 ... Business Examples: Physical Inventory ... 558 23.5 ... Summary ... 560 24.1 ... Standard Three-Way Match ... 561 24.2 ... Evaluated Receipt Settlement ... 565 24.3 ... Document Parking ... 568 24.4 ... Variances ... 569 24.5 ... Blocking Invoices ... 572 24.6 ... Releasing Invoices ... 578 24.7 ... Business Examples: Invoice Verification ... 579 24.8 ... Summary ... 582 25.1 ... Last In, First Out Valuation ... 583 25.2 ... First In, First Out Valuation ... 589 25.3 ... Lowest Value Determination ... 593 25.4 ... Business Examples: Balance Sheet Valuation ... 599 25.5 ... Summary ... 600 26.1 ... Material Ledger Overview ... 603 26.2 ... Material Ledger Data ... 605 26.3 ... Material Price Determination ... 608 26.4 ... Business Examples: Material Ledger ... 611 26.5 ... Summary ... 612 27.1 ... Classification Overview ... 613 27.2 ... Characteristics ... 615 27.3 ... Classes ... 620 27.4 ... Class Type ... 622 27.5 ... Class Hierarchies ... 625 27.6 ... Object Dependencies ... 626 27.7 ... Finding Objects Using Classification ... 627 27.8 ... Business Examples: Classification ... 630 27.9 ... Summary ... 632 28.1 ... Document Management Overview ... 634 28.2 ... Document Information Record ... 634 28.3 ... Creating a Document ... 636 28.4 ... Linking an Object to a Document ... 638 28.5 ... Documents and Classification ... 640 28.6 ... Summary ... 644 29.1 ... Overview ... 646 29.2 ... Early Warning System Setup ... 647 29.3 ... Schedule an Early Warning System ... 655 29.4 ... Early Warning System in Action ... 656 29.5 ... Exception Analysis ... 658 29.6 ... Business Example: Early Warning System ... 659 29.7 ... Summary ... 660 30.1 ... Overview ... 662 30.2 ... Direct Procurement ... 664 30.3 ... Stock Transfer (Interplant Transfer) ... 667 30.4 ... Withdrawal from Alternative Plant ... 670 30.5 ... Subcontracting ... 671 30.6 ... Consignment ... 675 30.7 ... Pipeline Material ... 677 30.8 ... Business Examples: Special Procurement Key ... 677 30.9 ... Summary ... 678 31.1 ... The Basics of Reporting ... 679 31.2 ... Purchasing Reports ... 681 31.3 ... Inventory Management Reports ... 686 31.4 ... Standard Analyses ... 689 31.5 ... Batch Information Cockpit ... 695 31.6 ... Summary ... 697