SAP – System Application and Products in Database.

It is German software implemented by IBM

SAP is an ERP tools (Enterprise resource Planning)

Whenever we want to start up an organization we require 4M’s (Money, Machine, Manpower, &
Materials) to control all these activities we require an ERP tool to control all the business activities.
It plays very important role in developing organization. We have no. of ERP’s such as ORACLE,
JDEDWARDS, SBIAS, and EBAN etc.

“The beauty of SAP is Integration of all the Modules”

MM – Interdependencies to other Modules

WM
WM
..

From technical side we have ABAP (SAP Own Language), (Advanced Business Application
Programming)

SAP is based on client/server technology & works on GUI (Graphical User Interface)

Reasons for preferring SAP in the companies:

a. Gives solution to all departments in enterprises to gain success.

b. Tight security, if you have done anything in one department automatically it will reflect in
relevant department no need to inform.
c. Data security
Now we are using SAP version

ECC6.0 (Enterprises Control Component)

Enhancement package for ECC 6.0 version EHP 7
EHP 8 is coming soon

Layers in SAP:

In 1973 SAP is using r/1 architecture i.e. Presentation, Application and Database after 5 years they
have implemented r/2 architecture (1979) i.e. Layer 1: Presentation and Application, Layer 2:
Database.

Finally in 1992 SAP as implemented R/3 architecture (3 tier architecture)

Layer 1: Presentation
Layer 2: Application
Layer 3: Database

Now SAP implementers are using other ERP database but SAP as implemented HANA by 2025 all
the implementers will use HANA for data storage.

It is a layer what we are seeing on screen where we give inputs like user ID and password which
hits the application layer and from layer 2 hits the database for getting data. It will take fraction of
sec time to get data.
Ex: ICICI, SBI net banking.

Presentation Application Database

Layer Layer Layer

WP

SAP Views:

SAP as 3 views. There are as below:

1. Functional View
2. Customized View
3. Technical View

In Functional View client team will be working like end users, power users, super users, core users
etc. consultants from implementation(Functional & Technical Consultants) will not have any
authorization on functional .
In Customized View all the consultants from implementation partners will be working. We have
to customize all the business process to client. End users and technical consultants will not have
authorization.

In Technical View all the technical consultants will be working to customize client’s requirements
which are given by functional consultants. End users and functional consultants don’t have any
authorization.

Functional consultants are the face of clients we have to take request from end users if it is not in
SAP standard then we will sit together with technical consultants.

Different Types of Projects in SAP:

1. Implementation Project
2. Support Project
3. Rollout Project
4. Upgrade Project

In Implementation project whenever client wants to turn up his business operations into SAP
Then they will raise a request to implementation partners.
Implementation partner will take approval from vendor (SAP) for required authorization. It will
take 1 year time. As per client business requirement different module consultants will work.

SAP as suggested a different methodology to implement SAP for ay client. Types of

methodologies
a. ASAP (Accelerated SAP)
b. S – IMPLE
c. SCRUM
d. AGILE
e. RUN SIMPLE

Whenever implementation partner receives the order from client to implement SAP then they
start using ASAP methodology (ASAP stands for accelerated SAP).
ASAP consists of guidelines to implement SAP that is in step by step of implementing SAP.
ASAP Consists of 5 phases:

1. Project Preparation
2. Business Blue Print(BBP)
3. Realization
4. Final Preparation
5. Go- Alive & Host support
In Project Preparation phase the implementation partner management and client management
will involve. In this phase all the technical consultants will be working on client with business
requirement such as infrastructure, system application etc. Here no functional consultant as scope
to work.

Project Preparation Activities:

User Licenses: - Any client if they want to implement SAP they need to purchases user licenses
from SAP.
Based on number of end user they decide on how many user licenses to be purchases from SAP.
Ex. – Total no of end user of Metro is 1500
Each user licenses cost around Rs. Rs. 80000/-
The client has to pay this money to SAP and get the user licenses.
1500 * Rs. 80000 = Rs. 12 cr.
22% of Rs 12 cr. as AMC (Annual Maintenance cost)
This is not one time income to SAP. Every year client has to pay 22% licenses cost to SAP in the
form of AMC.

A Landscape is arrangement of server. If any client wants to implement SAP they need to buy
servers.
SAP suggests going for 3 servers.
a. Development server
b. Quality server
c. Production server

Development server will be used to configure the client business process into SAP. This server will
be used by consultant.1 golden client, 2 testing clients.

Quality server will be used to test the scenario. It is used by consultants and core users. Core
users are the users from client side who is having experience in business process.

Production Server is a live server where clients will work. End users are from clients where end
users will do day to day transaction in SAP. Production server will be used by core users and end
users.

Consultants don’t have access to production server. End user and core user don’t have access to
development server.

Server Environment

Decide where to keep, room temperature and server room security.

Consultation facilities: If it is domestic project all the consultants will go to client place for
implementing SAP and if it is foreign project from each module one consultant will go to client
place and remain will work from off – shore. The average tenure for domestic project is 8 months
and for foreign 13 months. The team size for unknown client is 15 and for known or foreign client
are 60.

In Business Blue Print (BBP) all the technical, functional and all related module consultants will
work together on client business process. In this phase will collect all the information from client
and will prepare BBP document and sign off. BBP document consist of AS-IS and TO-BE document.

AS-IS document consist of the present business process of client whatever core user explain as it
is, we mention in the document. The requirements gather we need 2 months time.
TO-BE document consist of how the present business of the client is going to be in SAP. While
preparing TO-BE document we may find some GAP’s.

GAP: - Any client business process if there is no solution in SAP then we called it as GAP.
Whenever we find GAP we will prepare GAP analysis document. (Scope& Screep)

In GAP analysis we take clear description from client regarding GAP and we will search for some
alternative solution if there is a solution then we will prepare BBP document and will send to core
users for sign off now core user will go through the BBP if everything fine then he will send
confirmation mail after getting mail we take the signature of core user and Project manager (PM)
in singing off form and will give one copy to client. Efforts of consultants in GAP are Functional
consultant 35 days Technical 30 days. Without signing off document don’t move to next phase in
any case. In implementation we will spend more time in BBP, BBP is more critical stage because
success of implementation is based on how you accurate data from core users.

After receiving BBP signing off from core users we will move to next phase of ASAP methodology
called Realization.

In Realization phase we will configure client business process into SAP or mapping TO-BE process
in SAP. In this phase we enter into development server to configure the client business process
into SAP.
We have 2 types of configuration:

1. Base level Configuration

2. Final level Configuration
In Base level configuration in which no need to depend on other modules. It is a configuration
which is based on one module.

In final level configuration in which we need to depend on other module configuration. We can’t
do our own.

After completion of base line configuration and final configuration we transport the entire request
from Development server to quality server. After transporting the request from development
server to quality server then we do internal testing in quality server. Testing are 2 types unit
testing and integration testing. In unit testing only single module no need to depend on other
modules. In Integration testing we need to depend on other module consultants.

Phase 4: Final Preparation we will be doing testing on different processes such as positive testing
negative testing, random testing etc in all these testing if everything ok then will announce for a
cutover Go live date. This process will take 2 months.

Final preparation activities:

1. Training to core users for 15 days, after training to core users will ask them to test the
scenarios and confirm they have 10 days time for testing if everything fine then they will
give UAT (User Acceptance Test). After signing UAT we transport all the request from
quality to production server.

Throughout the implementation project we will take 2 sign off documents 1 for BBP & 2 nd for UAT.

In Go Live & Post Support we will transfer data from quality to production server were clients will
be works. Implementation Company will support for 6 month in post Go live

This Support Project will be taken care either by Implementation Company or they may go for
new company once they start this support project it is called AMC/AMS (Application
Maintenance Support).
In AMS project we will go for agreement called SLC or SLA (Service Level Agreement). In Support
Project all the consultants related to functional as well as technical will work on tickets and issues
in go live phase.

Support is solving the issues raised by the clients who already implemented SAP.

Levels of issues in Support project:

1. High Priority – 4 Hrs

2. Medium Priority – 24 Hrs
3. Low Priority – 48 Hrs

1. Any issues if it is stopping client business process then we treated as High Priority.
2. Issues in order are treated as Medium Priority.
3. Issues in enquiry, quotation and contract are treated as Low priority.

In Rollout Project is similar to implementation project more or less it is extension of operations

for new plant of the company acquired by client. Time period for rollout project is around 3 to
4months; here all the functional & technical consultants will be working.

I. Company code roll out: - If the client is starting their business in another country then they
extend SAP Configuration from one company code to another company code.
 II. Plant roll out: - If the client is introducing new plant into the business then we have to
configuration that Plant into SAP, this will call to plant roll out.

In Upgrade/Enhancement project whenever there is change in version will go for this upgrade
project. It will take time period for 1 month.

SAP Easy Access Screen

Easy Access screen is an end user screen.

MATERIAL MANAGEMENT (MM):

.
A business process in SAP termed as Module. SAP MM is one of the important modules in SAP ERP
software MM module supports the procurement and inventory function occurring in day to day
business operations. This module supports many aspects such as Purchasing, goods receiving,
material storage, consumption based planning, Inventory and Logistics. SAP MM Module is fully
integrated with all other modules in SAP R/3 system such as FI, CO, SD, WM, QM, PM, and PP.

Business process cycle in MM is P2P (Procurement 2 Pay)

1. Purchasing (PR, RFQ, Quotation, Price analytics and PO)

2. Inventory Management ( GR/GI)
3. Logistics Verification system (IR & Settlement)
MM Procurement process starts with business cycle P2P. Whenever requirement comes from
production team or sales team etc for procuring raw materials for finished goods for new material
we have to start with procurement process PR (Purchase Requisition). PR can be raised by
Production user, storage user or purchasing user. In PR we will maintain all the details about
materials and then we will go for Source determination (SD). It is for finding suitable vendor. A
vendor can be standard vendor, regular vendor, fixed vendor or one time vendor. After selecting
suitable vendor we will go for RFQ(request for quotation) once RFQ done we will nominate
vendor will give priority number once quotation done will go for price comparative statement
basing on this we will create PO(Purchase Order). Purchase Order is a legal document for vendor
basing on PO he will acknowledge and supply material then immediately IM (Inventory
Management) once goods received from vendor IM will come into picture then GR (Goods
Receipt) will be done basing on GR we will create IR (Invoice Receipt) it is giving confirmation to
vendor for supplied material about quantity, price, quality and payment details finally settlement
will be done.

Sales/Production PR SD RFQ PO
Sales/Production

Material Received
Storage GR IM/QM

Payment
IR

SAP MM Sub Modules:

 Material Planning
 Purchasing
 Inventory Management
 Vendor Valuation
 Invoice Verification
 Statutory Requirements

We have 3 types of data

1. Organization data (Company, Company code, purchase org, plant, storage location)
2. Master data ( one time Activity data storing all the info related to material, customer,
vendor etc)
 3. Transaction data (clubbing of Org data & Master data is called transaction data, it is
in mm is PO,PR,GR, RFQ Etc without creation of organization data and master data
we cannot create transaction data )

ORGANIZATIONAL STRUCTURE

 Company/Client - 6 Characters
 Company Code – 4 Characters
 Plant – 4 Characters
 Storage – 4 Characters
 Purchasing Organization – 4 Characters
 Purchasing Group – 4 Characters

Client represents the corporate group (Organization). Company Code is a company with in a
corporate group. Plant is a organizational level where Material Requirements Runs (MRP)
generally used to describe a production site, a distribution center. Valuation Area means each
plant can have it own material price and account determination it determines at which level a
material is valuated it can be at company code level or plant level but recommends VA be set at
Plant level valuation area is nothing but plant. Storage level is a sub division of plant where
materials managed (raw materials, MRO (Maintenance, Repair and Others) and Finished goods).
Purchase organization unit is responsible for procuring material or service for one or more plants
and for negotiating general conditions of purchase with vendors and it assumes legal
responsibility for all external purchase transactions. Purchase Organization is sub divided into
Purchasing Group (Buyers Group) which are responsible for day to day buying activities.
Company/Client
Define Company:
Path:
SPRO  Click on SAP - IMG  Enterprise Structure (ES)  Definition  Financial Accounting (FA)
 Define Company  Enter  Go to New Entries
SPRO

SAP – IMG Reference

Enterprise Structure (ES)/Definition/Financial Accounting (FS)

Define Company/New Entries

New Entries:
Save & Continue, Data Saved.

Company Code
Path:
SPRO  Click on SAP - IMG  Enterprise Structure (ES)  Definition  Financial Accounting (FA)
 Define Company Edit, Copy, Delete, Check Company Code  Enter  Click on Edit, Copy,
Delete, Check Company Code.  Double Click on Copy, Delete, Check Company Code

Edit, Copy, Delete, Check Company Code

Double click on Edit, Copy, Delete, Check Company Code

Click on copy org. object (f6)

Enter copy company code: standard 1000 to your company code

Click √
Click yes

Click yes

Change the currency as per your company location as showed below

Click on √ button to continue

Click on √ button to continue

Click on √ button to continue

Click on √ button to continue

Click on NO button to continue

Click on √ button to continue

Click on X button to continue

Click on copy button

Click √ to continue, click back
Double click on EDIT Company Code Data
Go to Position  give your company code (4444)  select your company code  click on details
button  enter details as showed in below screenshot

Company code
Click on address button to enter address of company code as showed in below screen
After editing address click on √ and save.

PLANT
Path:
SPRO  Click on SAP - IMG  Enterprise Structure (ES)  Definition  Logistics - General 
Define, copy, delete, check plant  Enter  Define Plant  Double Click on define plant  New
Entries  Click

Enter Plant, Name 1 as showed in below screen shot

Click on address button to enter plant details as showed below:

After editing address click on √ and save.

STORAGE LOCATION
Path:
SPRO  Click on SAP - IMG  Enterprise Structure (ES)  Definition  Material Management
(MM) Maintain Storage Location  Click on it
xEnter Plant and click √ as showed in below screen shot

New Entries  Enter storage location and description and save

PURCHASE ORGANIZATION
Path:
SPRO  Click on SAP - IMG  Enterprise Structure (ES)  Definition  Material Management
(MM) Maintain Purchase Organization  Click on it  New Entries
Enter Purchase organization and description and save it as showed in below screen shot
Purchase Organization we can assign to company code level which acts as a central Purchase
Organization with this we can only create RFQ (request for Quotes). , standard Purchase
Organization are responsible for special procurement process like pipeline, consignment process.
Ex: Gas, Electricity etc., Plant Specific Organization acts as cross company code purchase
organization this will act as cross company code & cross plant.

Assignment of Organization Structure

Company  Company Code  Plant (Storage we allotted to plant) Purchase Organization

Path:
SPRO  Click on SAP - IMG  Enterprise Structure (ES)  Assignment  Financial Accounting
(FS)  Assign Company Code to Company  Click on it  Go to position  Enter your Company
Code  Enter  Enter your company in Company as showed below in image.
Save  Go back  Logistics General  Assign Plant to Company Code (CoCd)  Click  New
Entries  Enter CoCd & plant as showed in below image,

Save.

*** Note:
 1. One company can have n no. of CoCd, one CoCd can have n no of plants and each plant
have their own storage location.
2. We can’t assign one plant to 2 company codes.
3. One purchase Organization can assign to n no of plants.

Purchase Organization Assignment

Central Purchase Organization

Path:
SPRO  Click on SAP - IMG  Enterprise Structure (ES)  Assignment  Material Management
 Assign Purchase Organization to Company Code  Click on it  Go to position  Enter your
Purchase Organization  give your CoCd  Save as showed below in image.
Purchase Organization to Plant
Path:
SPRO  Click on SAP - IMG  Enterprise Structure (ES)  Assignment  Material Management
 Assign Purchase Organization to Plant  Click on it  New Entries  Enter your Purchase
Organization and Plant  Save as showed below in image.
Purchase Organization to Plant
Path:
SPRO  Click on SAP - IMG  Enterprise Structure (ES)  Assignment  Material Management
 Assign Standard Purchase Organization to Plant  Click on it  Go to Position  Enter your
Plant and Purchase Organization  Save as showed below in image.
Save

SAP MM – PROCUREMENT PROCESS

Every organization acquires material or services to complete its business needs. The process of
buying goods and obtaining services from vendor is procurement. It is sub divided into following
parts

 Basic Procurement
 Special Procurement

Basic Procurement:

It is a process of acquiring goods or services in right amount, at right place, at right time. So the
method of getting services, supplies and equipment from vendor is termed as procurement. The
quality of procurement is attempting to get the right balance.

Procurement lifecycle:

1. Requirement and Information Gathering procurement process starts with gathering

information about products and its quantity then will look for supplier who can satisfy the
requirement.
2. Supplier Contact after gathering information about product and its quantity its time to
contact supplier who can fulfill the requirement.
3. Background Review after contacting vendor will check his background such as delivery
quality, installation, warranty. Some samples of products can examined for quality.
4. Negotiation some negotiation will make with supplier for delivery dates, products, price,
and services. After this will enter into contract that is a legal document between vendor
and client. A contract will include all necessary information like price, quantity of product,
delivery date etc.
5. Order Fulfillment after entering into contract vendor will deliver goods as per order given
by client in the form of PO.
6. Contract Renewal once the goods or services are consumed and contract got expire and
needs to renew or the company is to be reordered then they will go for old vendor who
has got exp with client or they will go for new vendor.

Basic Procurement Activities

Determination of requirement – what material or services required.

Requisition: Requirement will come from department in the form of PR.
Purchase Order: when the requisition is approved it becomes PO
Goods Receipt/Invoice received: the material is received. Condition and quality of
material verified then invoice will receive from vendor.
Invoice received/Vendor Payment: Reconciliation of the invoices and PO then vendor is
paid.

Special Procurement
Special procurement is a stock were these stock is not belongs to company it is located in
different place for different purpose. Special procurement is divided into the subsequent
areas.

Consignment Stocks: Material that is available at our store premises but still it belongs to
vendor owner of the stock; if we utilize the material then you have to pay to the vendor.

Third – Party processing: third party will send goods directly to customer. Company will
pass sales order to vendor.

Pipeline Handling: the company need not be order or store the goods. Its obtained when
we required via pipeline.
Ex: water, Electricity.

Returnable transport stock – Company receives goods in containers which belongs to

vendor that to be kept in company under until it returns.

Subcontracting – company will procure goods for third party.

Stock transfer using stock transfer order – internally to one plant to another via special
type of purchase order – stock transfer order. Intro STO and Inter STO.

Procurement with outline agreement – Agreement/Contract

BASIC DATA

1. Material Master Data

 2. Vendor master Data
3. Purchase Info record (e.g. Prices /terms and conditions)
4. Source list
5. Quota arrangement list
6. Condition master data

MASTER DATA

Master data will play very imp role in SAP. Basing on modules we have different master
data. It is a onetime activity which will take all information about customers, vendors,
materials etc which saves the time of end user, clients and customers. We will not change
the data until unless request comes from customers.

1. Material Master Data

The material master data contains all the description of materials and keeps in stock.
Integration of all materials details in material master data. It acts as central master data.

Material Master Views: Module wise

SD
MM PP

WM Material FI

CO
Storage
QM
MM SD WM FI PP CO QM

Basic data 1 Sales Org 1 Warehouse 1 Accounting 1 MRP 1 Costing 1 QM

Basic data 2 Sales Org 2 Warehouse 2 Accounting 2 MRP 2 Costing 2
Purchasing Sales/gen/plant 1 MRP 3
Purchase order text Sales/gen/plant 2 MRP 4
Plant/Storage 1 Sales text
Plant/Storage 2
Material Master:

Material: whenever we create material in SAP system always determines whether number should
give internal or external depending upon the configuration. We define whether we can allocate
internal or external. Max no of characters allow for creation of material is 18 we cannot go beyond
that and system won’t accept.

We can maintain internal no ranges and external no ranges for material creation. If we don’t
maintain any number while creating a material in (MM01) then system will take internal no range
assignment.

Define Number ranges for each Material Type:

Path:
SPRO  IMG  Logistic - General  Material Master (MM)  Basic Settings  Define Number
Ranges for Each Material Type  Click  Groups  Select Material Type (Element)  Click on
Element/Group  Create New Group  Give Group Name & Give number ranges From ---- to
number range and save.

After Creating Number Ranges we need to assign to our Material type (YERT).

Go back  select material type  go to element/ Group  assign created group to Material type
 save.
Save

We can reduce the length of the material.

Path:
SPRO  IMG  Logistic - General  Material Master (MM)  Basic Settings  Define output
format of material no.  Click  give material no. length and save as showed below in image.
Industry Sector:

Industry sector will define the category of the material i.e. Industry type. We can assign
Beverages, chemical industry, plant/Engineer industry etc.
We can customize our own industry sector as required by client.

Path:
SPRO  IMG  Logistic - General  Material Master (MM)  field selection  Define industry
sector and industry sector specific field selection  Click  new entries & give the details as
showed below:
Industry Sector we can have any number or alphabet of 1 character. We can copy from industry
sector A. Select A and click on copy as button, maintain your industry description and field
reference as A which we have copied from A & save.

Field reference will control field keys such as hide, display, optional & required depending upon
the selection of the keys the fields will act in the material master.
Valuation Area:

This area controls the material specific to plant. If we assign valuation area to plant then we can
maintain different prices for same material in different places. If we maintain to company code
then we cannot give different prices it will be same price in all plants.

Path:
SPRO  IMG  Definition  Logistic - General  Define Valuation Class  Click & see it is
defines to plant as showed below in image:

Material Type:

Material type controls material master and it also controls number ranges screen displays material
views & functionality.

Material types are below: all are standard material types designed by SAP

FERT – Finished goods

HALB - Semi finished goods
ROH – Raw materials
HAWA – Trading Goods
PIPE – Pipeline Material
KMAT – Variant configuration
VERP – Packing Material
FOOD – Food materials
DIEN – service material

Path:
SPRO  IMG  Logistic - General  Basic Setting  Material Master  Define Attributes of
Material Type  Go to Position & give FERT to copy from standard material type or we can new
material type by selecting new entries.

After selecting FERT click on copy as (F6) and change your own Material type and save.
Save

After creating own material type we need to create field reference or we can copy from standard
SAP.
Path:
SPRO  IMG  Logistic - General  material master  Field Selection  Maintain field selection
for Data screens  Go to Position & give FERT to copy from standard field reference we can new
material type by selecting new entries.

Give your own field reference and save as showed below in images.
SAVE

Now we have assign to field reference to newly created material type.

Path:
SPRO  IMG Logistic – general  Material Master  basic setting  material types  define
attributes of material type  click  go to position and enter your material type & select  give
your field reference and save.
Save.

Creation of Material Master:

Material master contains all the materials that company procures, sells. Material master is a
central data that is available at all the levels.
Material master is created in client’s login it also called EASY ACCESS SCREEN.

Path:
Logistics  Material Management  Material Master  Material  Create (general) 
immediately  Click on create  ‘

T – Code: MM01

Give Material Number (Internal r External)

Industry Sector
Material Type
After entering the entire details click enter. Select MM views  Default Setting  Organization
Level  give Plant and storage location  Enter.
Now Create Material as screen showed below:
In MM module there are 6 views as below:

Basic data 1
Basic data 2
Purchasing
Purchasing Order text
General plant data / storage 1
General plant data /storage 2
Accounting1
Accounting 2
MRP1
MRP 2
MRP 3
MRP 4
Below are the fields for above views
Plant Accounting MRP Views
Basic Purchase
Plant data /Storage data Views
Basic Data 1 Data Purchasing Order
1 /Storage
2 Text
2
Basic unit of Base unit of Basic measurement Negative Accounting 1 MRP 1
measurement Measurement of unit stock in Valuation class MRP Type
Material group Order Unit Unit issue plant VC: sales order MRP 2
Old material no Variable order unit Storage bin stock Planned
Division Purchasing group Picking area Price control delivery time
General item category Plant specific material Temperature Future price Quota arra
group status conditions usage
Gross weight Valid from Storage condition MRP3
Net Tax indicator for material Container Availability
weight/volume/volume Qualify for free goods requirement Check
unit discount Harz material number
Size/dimension Automatic PO Cycle control physical
EAN/UPC Batch management inventory indicator
Packing Material Data Purchasing value key Maximum storage
X plant material status GR processing time period
(for blocking for Post inspection stock Minimum storage
overall) Quota arrangement list period
Valid from Source list Total shelf life
Manu part profile Period indicates for
Manu part number sled
Under delivery tolerance
Over delivery tolerance
 Basic Data 1

1. Basic Unit of measurement: here we have to maintain in which measurement we will measure
the material whether in numbers, each, set, lot etc. We can customize our own measurement by
using code “CUNI”.
We have to give BOM how we are manufacturing
Path:
SPRO  IMG activity  SAP NETWEAVER  general settings  check unit of measure  Create


SAVE

2. Material Group”: it indicated the material belongs to which group we will order material to
vendor thru material group. We can assign our own material group by going tcode “OMSF”.
Path:
SPRO  IMG Activity  Logistics General  Material Master  Setting for key fields  define
Material Group  Enter  give Material group, material description and save as showed in
image below  SAVE
3. Old Material Number: this indicates client previous non SAP material number this helps in
finding material easy in SAP and delivery in efficient manner.
4. Division: we have to maintain here in which division this material will go this helps for selling
the material in right channel for sales & distribution. We can customize our own division by
tcode “OMSP”
Path:
SPRO  IMGLogistics General  Material Master  settings for key fields  define division
 enter  new entries  give your division, division name & save.
5. General item category group: this is required for inbound delivered. Whenever we procure
raw materials and if that materials are not required for consumption or material got expired
then we will return it to vendor for doing return process we require this general item category
group.
6. Gross weight/Net weight/Volume: whenever we procure material they will be gross weight,
net weight. Gross weight should be above then net weight.
Gross price = base price – discounts
Net price = gross price + surcharges
Final Value = Net price + taxes
Volume is used for liquid type materials.
7. EAN/UPC: this is called article numbers.
EAN: European Article Number
UPC: Universal Product Code.
8. Size/Dimensions: This is required for transport, depending upon your material size, and length
breadth we have to maintain container requirement.
9. Packing Material Data: if our material is relevant for packing then we have to create one more
material using material type VERP – Packing material group in material master and we have to
give that material number here.
Basic Data 2 - is related to variant configure materials it takes 60 steps.
Variant Configure: it is like configuration. Selection of material
 Purchasing Fields:

10. Basic measurement of unit: this is copied from basic data 1.

11. Order Unit: if our base unit of measurement is differ from order unit then we have to give
order unit here. In rare cases our base unit of measurement and order unit are different.
Ex: our unit of measure is lot but will issue or sell in no’s.
Whenever order unit is different from measure unit system will ask for conversion.
12. Variable Order Unit: if you maintain variable order unit here it will change order unit while
creating pr, PO’s. We cannot change order unit while creating PO’s.
13. Purchasing Group: the group of people sitting in purchasing organization who are working on
purchasing of material from vendor. Once order is given by purchase organization the vendor
will directly supply the materials to plant for production. Purchasing group is different from
one plant to another plant. We can customize our purchasing group by tcode “ OME4”
Path:
SPRO  IMG  Material Management  Purchasing  Create Purchasing Group  enter 
give your purchase organization name and description save.
14. Plant Specify Material Status: this material is for specific plant purpose or for some other
purpose it is blocked for purchasing etc. We can use it for future use or for any other use.
15. Tax indicator for material: there are 2 types of taxes input tax and output. Input tax is nothing
but paid within the state our vendor and plant are in same state then we have to pay CST.
Whenever we sourced material from vendor we have to pay inner tax and whenever we sell
the goods we will pay output tax. As per government norm we have to pay taxes immediately
once manufacture but we will pay as per our convince. Taxes are different types CST, VAT,
SALES T AX, SERVICE TAX Etc.
16. Qualify material for discount in kind: this field indicates whether this material is eligible for
discount or not. If it is eligible then in which area it is eligible whether in sales or purchase.
17. Automatic PO: this field indicates for automatic creation of PO whenever we create PR
automatically PO will be created to vendor this is subjected to release strategy.
18. Batch Management: when set of materials are manufactured loosely then giving unique
number to those materials. This helps in finding the materials easily.
19. Purchasing Value Key: this defines the kind of reminder. Whenever we entered into
agreement with vendor for supply of materials we will maintain payment terms as per
payment terms we have to pay to` vendor which is maintained in vendor master. We can
define our own Purchasing value key by tcode “OME1”.
Path
SPRO  IMG Material Management  Purchasing  Material Master  Define Purchasing
Value Key  enter  go to new entries  enter all required entries and save.
20. Under delivery tolerance: materials delivered below the ordered quantity.
21. Over Delivery Tolerance: materials delivered above the ordered quantity.
22. Quota arrangement list: Quota arrangement is master data created by end user or from client
side it is created in easy access screen. It is a process of procuring materials from vendor in
ratios whenever we are procuring bulk materials then we will call for quotation from vendor
with respective ratio.
this defines vendors how he is supplying or how is he giving services. We will give points
to vendor whenever he supplies material depending upon the points we will decide to
increase or decrease the supply from vendor.
23. GR Processing time: after receiving goods from vendor the QM team will come for inspection
after inspection goods will be transferred to storage. This time taken for transferring goods to
storage is called GR processing time.max time period for GR is 2 days.
24. Post Inspection Stock: this field indicates whenever stock received from vendor it is stored in
unrestricted area after inspection it is moved to quality stock.
25. Source List: this is very important field it helps in finding vendor for supplying stock. if we
activate this field, system automatically will take vendor while creating vendor PO or system
will ask for source list . We can maintain manually in tcode ME01. We can customize our own
source list “OME5”.
Path
SPRO  IMG  Material Management  Purchasing  Material Master  Source List 
define source list required at plant enter 
26. Manufacture Part Profile / Manufacture Part Number: if we are procuring material from
vendor if that material is not manufactured by vendor then he orders same material to his
supplier his supply is different from what we ordered the company will lose his brand to avoid
these duplicate material we will mention part numbers or profile then vendor will supply as
per the specification provided in Material master.
Path
SPRO  IMG  Material Management  Purchasing  material master  define
manufacturer part profile  enter  new entry  save

Purchasing Order Text: whenever material manufactured in company it will store in storage
later will pack and sold to customer. We have to mention cautions or warning messages on
pack to know the packer or any others.
Ex: Handle with care, keep side up etc.

Plant/ Data Storage 1:

27. Basic unit of measurement: same as in basic data 1

28. Unit issue: unit issue may be different from measure. Unit issue of material from storage
location to any depts..
29. Storage Bin: if u have centralized warehouse management system then assign storage bin. It
is a part of warehouse management. If you don’t have WM then assign to storage location.
30. Picking Area: if you have warehouse management system then you have to assign picking
area to warehouse management system.
31. Temperature Condition: whenever you manufactured perishable goods or cold good you
have to maintain terms and conditions. We can customize our own by tcode “OMS7”
Path
SPRO  IMG  logistics general  material master  settings for key fields  define temp
conditions  enter  new entry  enter details and save.
32. Storage Condition:
33. Container Requirement: depending upon your material size, length and breadth we have to
maintain container requirement. “OMS8”.
Path
SPRO  IMG  Logistics General  Material master  setting for key fields  define
container requirement  enter  new entry  enter details  save.
34. Hazardous Material Number: whenever we transport dangerous material we have to create
one more material for hazardous material carrying item. To create material we have to go by t-
code “VM01”.
35. Cycle counting Physical inventory Indicator: this is one of the important parameter what
system is following by the company. Company standards like ISO, 6 sigma etc. this is used in
large sectors.
36. Max storage period:
37. Mini Storage period
38. Total Shelf life:
39. Indicator for SLED:

Plant/ Data Storage 2:

40. Negative stock in plant: if you activate this whenever goods issue process going on and the
stock is not available in plant system will allow you to do GI this is called negative stock.

In SAP we will create Master data, Organization data, purchase info records everything will be
saved in database which will be used in future this data is saved in tables and structures. The
data saved in tables is a permanent data and data stored in structure is temporary data. Every
table contains no. of fields. Master data is also called client level data or central data.
 Field Names: tcode: SE16N to check fields and tables
BUKRS: Company Code
MATNR: Material number
LIFNR: Vendor
WERKS: Plant
LGROT: Storage Location
SPART: Division
SPRAS: Language
EKORG: Purchase Organization
VKORG: Sales Organization
EKGRP: Purchasing Group

Table Names:
MARA: Material Master General Data
MARC: material master plant data
MARD: Material Master Storage Location data
MVKE: Material Master Sales Data
MBEW: Material Master accounting data

Extension of Material Master to Accounting Views:

Go to material master screen MM01 give your material details select accounting views.

41. Valuation Class: whenever we create material stock as to be evaluating at general ledger
account so that system as standard valuation classes for each material type depending upon
valuation class system will calculate general ledger. Standard valuation classes are as follows:

FERT – 7920
ROH -3100
HAWA – 3020
HALB - 7020

42. VC: sales order stock: In standard MM & SD process we have special procurement such as
consignment, pipeline.
43. Price Control: this we can mention in material type in OMS2. It is a standard price or moving
price of a material as floating currency or fixed currency. We have 2 types of price controls:
1. Standard price
2. Moving price.
In Standard price we have maintain S, if we give S system will calculate price X Quantity.
In moving price we have to maintain V. it takes average price.
44. Future Price: it is a price of a material which is going to increase or decrease we have to
maintain here along with valid from date.

And save the document now we have extended material to Accounting views.

Extension of Material Master to PP Views:

Go to MM01 give your material number select your MRP (Material requirement Planning)
views MRP1, MRP2, MRP3 & MRP4 give organization level and enter.

45. MRP type: it indicated which kind of procedure you are planning for procuring material. We
have material with planning (PD) without planning (ND) and reorder Planning (RE).
46. Availability Check: this indicates stock checking we have different types of check in MM & SD
01 –Daily check
02 – Individual check
KP – no check
And save the document now we have extended material to Accounting views and also to MRP
views.
Whenever we have changed material data in material master for already created material we
can check what change we did by going T Code MM04.

Extension of Material Master to Plants:

We can extent our material to n number of plants by going to T Code MM01.

MM01  give your material number enter  give your plant & storage location  enter
 save.

Extension of Material Master to Storage Location:

Go to t code MMSC  give your material number and plant  select list of extendable
storage location  enter  give your extended Storage location  save.

Material Master increasing Standard Price:

We can increase our material standard price which we have entered in Accounting 1 view by
going t code MR21

Give
Posting date:
Company Code:
Plant:
Enter  Old value  new value save

Change Material Type for your material Number:

Path:

Easy access screen  sap menu  logistics  material management  purchasing 

material master  material  MMAM  enter 

Go to tcode MMAM  give your material number  give your new material type  execute
 save.

We need to re enter MRP Type, standard price planned delivery time after changing material
type.

If we have open PO’s or PR’s system will not allow you to change the material type unless
until you close those PO’s and PR’s.

Mass change of material master:

Path:

Easy access screen  sap menu  logistics  material management  purchasing 

material master  material  MM17  enter 

If we want to change any field at a time for a batch we will use mass maintenance.

TO Check the Material Stock:

T Code: MMBE

Enter  give your material or material +plant or material + plant + storage Location etc 
execute.

T codes for Material Master

MM01 – create
MM02 – Change
MM03 – display
MM04 – changes
MM06 – flag for deletion
MM11 – create scheduled
 We can create scheduled material by going to t code MM11. Creation of material for future
date by giving material type, industry sector and scheduled date

MRP - MATERIAL REQUIREMENT PLANNING

Production team will be handling this MRP, whenever stock requirement is been placed by sales
dept. production team will create production order with this they will start production process &
they will place the material in production storage location.

We have different types of procurement depending upon material type procurement have
different process.

1. External procurement
2. Internal procurement
3. Both external & internal Procurement

This MRP run will be controlled by MRP planner. He is an individual who will be running the cycle
as per schedule & operations. We have to define this MRP planner at MRP 1 in material master. If
internal procurement is happening then production team will create PR and then create
production order, if it is external procurement then production team will raise PR then they will
handover to procurement for PO.

Creation of MRP group

System will determine plant & MRP group for stock availability check. If system wants to
determine stock system as to do availability check for availability check system required MRP
group.

Path
SPRO  IMGMaterial Management  Consumption based Planning  Carryout overall
Maintenance of MRP groups  enter  give your plant  click on create  give new MRP group
& description 
Save.

Define MRP group to each material type:

Path
SPRO  IMG  Material management  Consumption based planning  MRP group  Define
MRP group to each material type  enter  click on new entries  Enter your Material Type,
Plant, MRP group  enter  save
Assign your MRP group to your material master.
Go to your material MRP views

1. Change your MRP type from ND to PD after changing system will ask MRP controller.
2. Define MRP controller
Path
SPRO  IMG  Material Management  Consumption based planning  Master data 
MRP controller  enter  click on new entries  give plant, MRP controller and person
details  save

3. LOT size: select EX in lot size enter to go MRP 2 view

4. Give storage location
5. Scheduling Margin Key:
Key that the system uses to determine the floats required for scheduling an order
Path
SPRO  IMG  Material Management  Consumption based planning  planning 
define floats (Schd Margin Key)  enter  go to new entries  give your plant & Margin
schd key  enter, save.
 Assign this in MRP2. Enter to go MRP 3.

6. Strategy Group: we have different types strategy when we manufacture or produce

material
 Make to order
 Make to stock
 Production with assembly
 Make to order without assembly

10 – Make to stock
20 - Make to order
7. Availability Check: we have type of availability check.
 Individual check
 Daily requirement, maintain availability check as 02.
8. Tot. repl. lead time: when goods are reached to storage location after procurement
process. It is a time taken to convert raw materials into finished products is called as total
repl. Time. This as to be maintained days.
Save your material master.
2. Vendor Master Data

This is an important master data in MM. whenever production team or sales team required
raw materials we have to procure materials from supplier or vendor and it is also called
source determination. There are few kinds of vendor who supply materials regularly called
regular vendor or fixed vendor. There are one time vendors also who supplies materials
once or twice in calendar year for one time vendor data will not be stored in database.
Whenever we are creating a PO system will ask for vendor.

Vendor master will be controlled by Account Group.

Vendor account group will control how vendor should behave will be procuring materials
or services.

Types of Controls:

1. Account group controls number ranges for vendor

2. It controls partner functions
3. It controls fields in vendor master.

Number Ranges:

Define number ranges whenever we are defining number ranges for vendor master it can
be either internal or external no. ranges

Partner Functions:

We have different types of partners in SAP SD and MM.

SD:
1. Sold to Party (SP) *
2. Ship to party (SH)
3. Bill to Party (BP)
4. Payer (PY)

MM:
1. Ordering Address (OA)
2. Goods Supplier (GS)
3. Invoice recipient (IP)
4. Vendor (VN)*
5. Forwarding Agent (FA)

The ordering address partner function acts as a third party between company and supplier.
He will receive orders from company he is responsible for taking orders. (OA)
 After receiving order by ordering address vendor directly supply goods to company (GS).

After goods delivered by GS partner function IP partner function will issue invoices to the
company, he will act as intermediate between GS and Company.

VN will take care of all the above functions, we VN will be mandatory in real time.

Account group also controls fields in Vendor master such as hide, optional, suppress and
required.

Creation of Account Group:

Path:
SPRO  IMG  Logistics - general  Business Partner  Control  Define Account Group and
field selection for vendor  Enter.

After entering we can create new entry or we can copy from standard Account group given by SAP
there are 0001 & LIEF. After entering into new entries give Account group, Name and save as
shown in below screenshot.
As early ear said we can copy from standard account group go to position give standard Account
Group as LIEF click copy as (f6) give your account group, name and save as shown below in
screenshot.

Creation of Number Ranges for Vendor Master:

Path:
SPRO  IMG  Logistics - general  Business Partner  vendor control  Define Number
Ranges for vendor master record  Enter  go to intervals  create an interval between from
No. and To No.  Insert line enter no. (ZH) and from no. to no. and save as showed in below
screen
Go back & click on Number ranges  go to position  enter your account group  enter 
insert your number ranges and save as showed in below image.
Define Partner Functions for Vendor:
1st Partner roles  partner setting in vendor master  assignment to account group
Path:
SPRO  IMG  Material Management  purchasing  partner determination Partner Role
 Define permissible partner roles per account group click  new entries  give your
functions and account group as shown below

And save  go back  go to partner setting in vendor master  define partner schema click 
go to new entries  enter details as shown below
Save  click on partner function schema  new entries  enter details as shown below

Save.
Assign Partner schemas to Account group:
Path:
SPRO  IMG  Material Management  purchasing  partner determination Partner setting
in vendor master  assign partner schemas to account group  click  go to position  give
your account group  enter  give your partner schema  save

SAVE.
 Creation of Vendor Master:

Vendor master will be created at easy access by client side. It can be created at central level or
module wise here FI & MM can individually create with their related fields or we can maintain
centrally, find below codes for individually or centrally.

Central – XK01
MM – MK01
FI – FK01.

1. Creation of vendor with purchasing views:

Path:
Logistics  Material Management  Purchasing Material Data  vendor  Purchasing
 Create – MK01  Enter

We can give vendor number either external or internal, which we have created in OMSJ.
Purchasing Organization we have to give purchase organization in which we are going to create this
vendor or in which we are using this vendor.
Account Group vendor master fields are maintained by account group we have to give account
group what we have created in OMSG.
 Views in Vendor Master:

1. Address
2. Control
3. Contact person
4. Purchasing Data
5. Partner Functions

Below are the fields for above views

Address Control Contact Person Purchasing Data Partner Functions
Title Customer Contact details of Order Currency
Name vendor Terms of payment
Search term Inco terms
Street Address Minimum order value
Price control data
Salesperson, telephone,
account with vendor.
GR based inv verification
Acknowledge required
ABC indicator
Mode of transport
Automatic settlement
evaluation details
Return vendor
Service based Inv verification
Automatic purchase order
Grant discount in kind
Purchasing group
Plant delivery time
Confirmation control
Rounding profile
Price making agreed

In address screen we have to enter vendor details like name, search term address Etc.
In control screen we have to enter customer details, here while we are procuring material from
vendor same person will became customer if we don’t required material r material got expired we
will return to same vendor called customer.
In contact details screen we will enter contact details of vendor to whom we will going to contact.

Purchasing Fields:
1. Order Currency: in this field we will maintain vendor order currency, whenever we are
creating PR or PO system will take vendor currency but in settlement process system will
take company code currency.
2. Terms of Payment: here we will maintain payment terms, how vendor is accepting
payment and how he is giving discounts etc. we can define our own payment as
maintained in agreement with vendor:
Path
SPRO  IMG MM Purchasing  Vendor Master  defines payment terms  Enter
 New Enter  enters your details and save.

3. Inco terms:
It is an International commercial terms which is an agreement between sender & buyer,
Buyer & seller, Company & Supplier, consignee & Consigner for supply of material from
one place to another place.
Inco terms are developed by International Chamber of commerce since 1939.Thirteen
terms of sale accepted worldwide in assignment of costs and responsibilities between the
buyer and the seller, copyrighted by the International Chamber Of Commerce (ICC).
The last revision (1999) is named 'INCOTERMS 2000.' In brief these terms are
1. C&F (Cost And Freight)
2. CIF (Cost, insurance, And Freight)
3. Delivered At Frontier
4. Delivered Duty Paid
5. Ex quay
6. Ex ship
 7. Ex works
8. FAS (Free Alongside Ship)
9. FOB (Free On Board)
10. FOB Airport
11. FOR/FOT (Free On Rail/Free On Truck)
12. Free carrier
13. Free Carriage Paid To and Free Carriage Paid to and insurance.

Whenever we are procuring materials from foreign or foreign company sells materials to
Indian company we have to take help of CHA for clearing of materials at customs from sea
or Airport for that we required Inco terms.
4. Minimum Order Value: we have to maintain minimum order value for vendor acceptance
of supplying materials to the company.
5. Price Date Control: we have to maintain here in which condition rate as to be taken
whether in PO time or GR, or PR, IR.
6. Salesperson, telephone, and account with vendor: all these are general data pertaining to
vendor master. We have to maintain sales person, account number of vendor.
7. GR Based invoice verification: if we activated this field here or in Material master it will
automatically it will update PO. Whenever we receive goods system will allow us to do PO
without GR system will not allow for GR. If we ordered 10 qty in PO but vendor supplied
for 8 qty then we have to do GR for 8 Qty when the time of payment system will consider
GR qty. In real time this indicator always activated.
8. Acknowledgement required: if we activated this field whenever we create PO. Once PO
reaches to vendor we can expect acknowledgement receipt whenever vendor reads the
PO.
9. Automatic PO: if we activate this here or we can also activate this in material master
purchasing field it will help us to create PO automatically whenever we creates PR.
10. ABC Indicator: this is like vendor company process. Which system they are using which
standards. Which approach is using by vendor is ISI or others.
11. Mode of transport Border: there are two things :
1. Mean of transport - routes ( sea, Air, or Road)
2. Mode of Transport – Transport (Bus, Ship or Flight)
If your vendor is a foreign player then he has to transport materials from his place to client
place he has to mention mode of transport in agreement this all belongs to INCO TERMS.
12. Automatic Evaluation GR Settlement Details: this is like ratings to vendor about his supply
of material or quality, service etc.
13. Return Vendor: whenever we are procuring material from vendor there is return process
also reason for returning is excess material, expiry etc. we will return material to same
vendor he is called customer and also called return vendor. If we will activate this we have
to maintain customer number in control screen.
14. Grant discount in kind: if we activate this field here for vendor and same for in material
combo then discount is allowed.
15. Service Based Inv Verification: this is pertaining to service based when our vendor acts as
a service agent and it is valuated at invoice receipt.
16. Purchasing group: it is a mandatory field asset of people working IN purchase organization
called purchasing group. When the time of PO creation system will ask for Purch group.
17. Planned delivery time: this is time taken to deliver the material after PO raised.
18. Confirmation Control: this is maintained for ASN (Advanced shipping notice). After raising
PO and accepted by vendor he will supply goods as per agreement if he not then they will
be problem and at the same time if vendor is delivering then quality team or production
team will be engaged to complete work. This is also called tracking of material status.
We will get ASN in t code MD04.
19. Rounding Profile: we have different times of rounding profiles. There are
1. Ascending – 5.5(6)
2. Descending – 5.5(5)
3. Commercial – 5.4(5) & 5.6(6).
20. Price making agreed: this control is especially for service procurement process. (optional)

Partner Functions: created and assigned in OMSG.

SAVE.

Field Names: T code: SE16N to check fields and tables

LIFNR: Vendor
EKORG: Purchase Organization
Table Names:
LFA1 – Vendor Master General Data
LFB1: Vendor master company code data
LFM1: vendor master purchase organization data

Vendor master T codes:

MM FI Central
Create MK01 FK01 XK01
Change MK02 FK02 XK02
Display MK03 FK03 XK03
Changes MK04 FK04 XK04
Block/unblock MK05 FK05 XK05
Flag for deletion MK06 FK06 XK06

Changes (MK04/FK04/XK04): whenever end user changes any data or from client changes
data in MK02/FK02/XK02 we can see changes in MK04/FK04/XK04 by giving vendor details.
Here we can find username, date, time and changes what they made.
Block/Unblock (MK05/FK05/XK05): To block or unblock the vendor for temporary period of
time we use this transaction by using this transaction we can block vendor for creation of PO,
RFQ, Quotations, source determination or total block.
Flag for deletion vendor (MK06/FK06/XK06): we cannot delete vendor permanently just for
flag deletion vendor for permanent delete we need to contact to BASIS after taking approvals.

Expanding vendor master to Accounting views: (FK01)

After creating vendor master from purchasing views now we have to extend to accounting
views in real time this will be done by FI team or thru central it will be done.
Path:
Easy access screen  SAP Menu Accounting  Financial Accounting Accounts payable 
Master records  FK01 (Create)  enter  give your details like vendor number (created in
MK01), Company code and account group  Enter
Accounting views:

Accounting information Payment Data

Reconciliation account Payment terms
Cash management group

21. Reconciliation Account: it is a required entry. This is revenue reconciliation account recon
account is the account where several vendors are reconciled. Whenever you post MIRO
that goes to recon account. The standard Recon given by SAP is 160000.
22. Cash Management group: this field is relevant to authorized cash receiving person from
vendor side.
23. Payment terms: already we have entered payment terms in MK01 if FK01 is different from
MK01 then system will take purchasing payment term at the time of PO & accounting
payment terms at the time of IR.
XK07 – Change Account group:
We can change our account group if the vendor don’t have open PO’s, GR’s, PR’s etc.
Open PO’s & PR’s are nothing but if you not created GR for these called open PO’s n PR’s.
Path
Easy access screen  SAP Menu  Logistics material management  Purchasing
master data  vendor central  XK07 (Change account group)  give your vendor
 enter  enter give new accounting group  Enter  Save
Extending Vendor master to Plant:
Path
Easy access screen  SAP Menu logistics  purchasing  master data  vendor 
XK02 (Change)  enter  give your vendor number  company code  Purch
Organization  enter  go to purchasing Tab  Click on Extras  Add Purchasing Data
 enter  give your plant  select check box data retent. At plant level allowed.  click
continue  again go to Extras  click on different data  enter  do you want to create
the diff data? (YES) enter  create different data  give plant and click on purchasing
data and partners functions  click continue  save.
*** One vendor can be assigned to Number of Plants.
ME11 - PURCHASE INFO RECORDS: (PIR)

It is a master data which we maintain material master data and vendor master data; it is a
combination of material and vendor master data. System always gives priority to Purchase info
records. It is a master data we will create it in Easy access screen TCode ME11.
It is used to store information on vendor and a material at plant level or purchase org level. We
can create Info records exclusively for vendor and material combination. We can either give
purchase org or plant while creating PIR. It is not mandatory to maintain plant or purchase
organization. We can extend to different plants and purchase organizations.

Path:
Easy Access screen  SAP Menu  Logistics  material management Purchasing  Master
data  ME11  enter  enter Vendor no., Material, purch org and plant  select info category
standard (for normal procurement)  enter

Info records can be maintained at 4 types of procurement process:

1. Standard
2. Sub contracting
3. Consignment
4. Pipeline
The combination of both item and vendor called Purchase Info Records (PIR). The main
purpose of PIR is to fetch and adopt data to purchase documents such as PR, RFQ, PO and
 Outline agreement Etc. while maintaining PIR we are speeding up documents and avoiding
manual entry. PIR can also be updated automatically thru PO, Quotation & Outline
agreement by selecting INFO UPDATE. PIR contains prices, conditions you can store for
relevant plant and Purchase Organization.

Possibilities of Creating PIR:

We can create PIR with plant or without plant, with purchase organization or without; with
material or without but here we have to give material group.

Creation of Number ranges for PIR:

We can have internal number or external number range. PIR have 1 external and 1 internal
number range.

We cannot enter new entries of number ranges in PIR we have to use standard SAP series.

If we give material number system will take number series from IL, if we are not giving any
material number then system will take number ranges from IN. we can check number ranges by
going to tcode OMEO and also by going to path:

Path:

SPRO  IMG  Material Management  Purchasing  Info records  define number ranges 
enter  go and check in intervals.

Intervals
With material
Without Material

Define Screen Layout for PIR:

Screen layout is nothing but field selection either we can hide, do mandatory or make optional.

Path:

SPRO  IMG  Material Management  Purchasing  Info Records  Define screen layout 
Enter  Select Tcode  go to details button  select fields  do changes if required and save.
Select tcode and click on details button

Field selection group and double click on fields:

Make changes and save.

Creation of Purchase Info Records:

As defined above PIR is a master data created from client end it is a combination of MM & VM.

Path:
SAP Menu  Easy Access Screen  Logistics  Material Management  Purchasing  Master
Data  Info Records  ME11 (Create)  Enter  give Vendor , material, Purchase Org, and Plant
 enter
1. General data screen
2. Purch. Org. Data 1
3. Texts
General Data Purchase Org. Data 1/Data 2 Texts Conditions
1st, 2nd & 3rd Rem./Exped.( MM – Pur) Planed delivery time (VM – Pur, MM –
MRP2)
Vendor Material Number Purchase Grp(MM – Pur) PIR text
Sales person/Telephone(VM – Pur) Standard Qty & minimum Qty
Points Min Rem shelf life Period (MM – SL1)
Return Agreement(VM – Pur) Shipping Instructions (MM – Pur)
Prior Vendor Tol under del(MM – Pur)
Order Unit , conversion & variable Unit (MM – Pur) Tol over delivery (MM – Pur)
Origin Data GR basrd IV ( VM – Pur)
Supply Option – Available from – to Acknowledge Requried ( VM – Pur)
Regular Vendor Tax Code
Net Price
No cash discount
Price date control(VM – Pur)
Inco terms(VM – Pur)
Confirmation (VM – Pur)
Quotations – Data2
General Data Fields:

1. 1st, 2nd & 3rd Rem./Exped: This data is copied from Material master purchasing data
from purchasing value key. Still we can edit here system always gives preference to info
records.
2. Vendor Material Number: It is an optional entry. This is material number of vendor
ERP.
3. Points: based on points given by client we will give awards at the time of rebate
process.
4. Sales person/Telephone: This field is copied from vendor master purchasing data.
5. Return Agreement: This field is copied from vendor master purchasing view. It is an
agreement between vendor & Company. Whether goods supplied by vendor will take
back. Vendor can also act as a customer.
6. Prior Vendor: when you activate this field system will give preference to this vendor for
supplying material after regular vendor. he is an next immediate vendor for this
material. This is an optional entry.
7. Order Unit/Conversion/Variable Order Unit: These fields are copied from material
master purchasing view. Conversion will be taken from additional data. We can edit here
system always gives priority to info records.
8. Origin Data: this is the vendor business evaluation data. It is an optional data.
9. Supply Option (Available from, available to): if vendor supply material for particular
period then we have to mention from date and to date here. PIR is applicable for line
item. If PO is creating the line item level should match with delivery date if it is beyond
that date then system will throw you an error.
10. Regular Vendor: if you set this indicator system will take him as regular vendor for
supply of material. If you are going to create PO with different vendor system will, throw
you an error message.

Note: In source determination process if system fails to pick vendor from quota
arrangement (1st Priority), source list (2nd) Contracts (3rd) then it goes to Purchase info
record. If there are multiple PIR there for same material then system will pick regular
vendor for creating PO.

If regular vendor is selected for material and if we are going to create one more info
record for same material with different vendor then regular vendor field will be disabled.
“One material can have only one regular vendor”

Purchase Organization Data 1:

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 11. Planned Delivery Time: this field is copied from vendor master purchasing data same in
MRP . We can edit here system always gives preference to PIR.
12. Purchasing Group: this field is copied from material master (1 st) or from vendor master
also (2nd), this can be editable here.
13. Standard Quantity: it is a normal order quantity for this material to this vendor based
on this system will calculate effective price.
14. Minimum Quantity: we have to maintain what was the minimum quantity shall procure
from vendor. While creating PO if PO quantity is less than PIR qty then system will throw
you an error.
15. Remaining Shelf life: This field is copied from material master Storage location 1.
16. Shipping Instructions/Tol.Underdel/Tol.overdel: This data is copied from Material
master purchasing view still we can edit here.
17. Acknowledgement Required: this data is copied from Vendor master purchasing view
still we can edit here.
18. GR Based inv: This field is copied from vendor master purchasing tab still we can edit
here.
19. Confirmation Control: This field is copied from vendor master purchasing tab still we can
edit here. It is an confirmation of material shipping and delivery details, its like tracking
the materials.(Advanced Shipping Notice(ASN)).
20. Tax Code: This field is copied from PO. It is required for creation of invoice receipt(IP).
This field is available in item level data. We have 2 types of taxes INPUT tax (MM) &
OUTPUT tax (SD).
21. Net Price: this is the mandatory entry for creation of PO depending upon this system will
calculate price. Still you can change the price by maintaining condition master data.
22. No cash discount: if you select this option system will not allow you to calculate the cash
discounts, free discount or pay terms discount. In real time don’t select this option.
23. Price data Control: this option is copied from vendor master purchasing tab, still we can
edit here. This is for controlling of price.
24. Inco terms: this option is copied from vendor master purchasing tab, still we can edit
here system always gives priority to PIR.
25. Quotations: this field is in purch organization data 2 in PIR. If we have quotation then we
have to maintain RFQ number here.
26. Info record text: this text is copied from purchase order text from material master and
we can add PIR text here so that this will display in PO creation.
Condition Tab:
27. Validity: create new validity date here for PIR.

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 28. Gross price: in condition tab we have to maintain all conditions like discount, base price,
surcharges etc.

Observed Points:
1. When we are trying to create info records without material system will not give any
details of material we need to enter manually in info records screen.
2. If we have created info records without material then in display mode ME13 system
will not show any Purchasing organization data 1 details.
3. System will allow tick regular vendor for same material but it will deselect 1 st regular
vendor in 1st info records.

T – Codes of Info records:

ME11 – Create
ME12 – Change
ME13 – Display
ME14 – Changes
ME15 – Flag for deletion

Tables for Info records:

EINA - Info record general data

EINE – Info record purchasing table
KONH – condition header data
KONP – condition item data

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 ME01 – SOURCE LIST

Path:
SAP Menu  Easy access screen  logistics  Material Management  Purchasing 
Master Data  source list  ME01 (Maintain)  Enter

Source list always created by client side, it is a process of determining the vendor &
plant combination whenever we are creating material we will select source list in
purchasing view of material master this reflects in creation of PO system will ask for
vendor, plant & Material combo if you activate at end user level.

We can maintain source list IMG level.

Path:
SPRO  IMG  Material Master  Purchasing  source list  Define source list
requirement at plant level  enter  go to position  give your plant  select your
plant  click on source list 

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 SAVE.

System always gives preference to IMG settings.

CLICK on ME01  enter  give your material and plant  enter  give valid from and
to date, vendor, purchase Organization, Plant & click on fixed vendor  save

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 You can maintain more than 1 fixed vendor for same plant & material combination with
same validity period.
While we are creating PO if we maintain source list in MM – Purchasing tab or in IMG we
have to give material and plant combination fixed vendor, if we give other than fixed
vendor then system will throw you an error message or warn message.

We can generate auto source while we are creating source list in ME01 after giving
material and plant we enter into the source list screen there we find a button in red
color called generate records we can create by clicking there as shown in following
screenshot.

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 T codes for Source list:

ME01 – Create
ME03 – Display
ME04 – Changes
ME0M – Display by Material

Tables for Source list:

EORD: General Data

MEQ1 – QUOTA ARRANGEMENT LIST

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Quota arrangement is master data created by end user or from client side it is created in easy
access screen. It is a process of procuring materials from vendor in ratios whenever we are
procuring bulk materials then we will call for quotation from vendor with respective ratio.

We can activate Quota arrangement in material master purchasing data and it is also located at
MRP 2 level.

System will choose vendor in following sequence Quota SL  ContractsPIR.

Path:
SAP Menu  Easy Access screen  Logistics  MM  Purchasing  Master Data  Quota
Arrangement  MEQ1 (Maintain)  Enter  give your material & plant  enter  give valid
to date , Minimum qty split  Select Line  click on item overview

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SAVE – Quota arrangement list successfully maintained

T Codes of Quota Arrangement List:

MEQ1 – Maintain
MEQ3 – Display
MEQ4 – Changes
MEQM – Display by Material

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 ME51N – PURCHASE REQUISITION (PR)

PR is a first document in transaction data. It is an internal document raised by user

departments for internal use or production or for resale purpose. PR can be raised by sales
dept, production dept, purchase dept, storage dept etc. PR can be standard, third party,
consignment and stock transfer, Sub contracting.

Types of Purchase Documents:

A. Internal Purchase Document:

1. Purchase requisition

B. External Purchase Document:

1. Purchase Order
2. Request for Quotation
3. Scheduled Agreement
4. Contracts

Document Categories:

1. Purchase requisition - A
2. Purchase Order - F
3. Request for Quotation - A
4. Scheduled Agreement - L
5. Contracts - K
Document category will control entire functional document. It is already predefined by SAP and
assigned to Purchase document program.

Document Type:

We have different types of document types for every purchasing document and every
purchasing document should be controlled by Header data. Every purchasing document has two
structures:

1. Header data
2. Item data

Header data is controlled by document type and it controls the entire document.
Document category control line item in purchasing document and it is applicable to particular
line item only.

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Document Type Controls:
1. It controls number ranges
2. Fields in purchasing document
3. Allowed item category.

Item Category:
It defines how the procurement of line item as to be controlled. It as to be determines how the
item to be procured in standard process, consignment process, sub contracting process or third
party or STO process.

Allowed Item Categories:

Standard – Blank
Consignment – K
Sub contracting – L
Third Party – S
Stock Transfer order – U
Services – D

Above all item categories are standard SAP defined we cannot define new item category but we
can copy as standard once and we can maintain with our own configuration.

Define Number ranges for PR:

In real time we will maintain number ranges for dept wise ex: Storage Dept, Inventory Dept &
Purchasing dept etc.
Here in practice we will not create dept wise we will go as per standard number ranges internal
and external number range.

Path:

SPRO  IMG  Material Management  Purchasing  Purchase requisition  Define number

ranges  Enter  Interval  create external number range and internal click enter  Save.

Define Screen Layout at Document Level:

The standard layout for Purchase requisition is NBB. We cannot create new layout but we can
copy from standard layout and we can customize our won layout.

Path:

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SPRO  IMG  Material Management  Purchasing  Purchase requisition  Define screen
layout at document level  Enter  go to position n enter standard Field (NBB)  Select NBB
 click on copy as  give your own field  Enter  Save.

Click on details button after selecting your customized screen layout and select required entries
by double clicking on each group.

If you deactivate all then it is hide, if you activate all then it is required entry.

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SAVE.
Define Document Type:
The standard document type for PR is ‘NB’. We cannot create new document type but we can
copy standard type and we can customize.

Path:
SPRO  IMG  Material Master  Purchasing  Purchase requisition  Define document
type  Enter  go to position  Select NB  click on copy as button  give customized
type(WNB)  554 entries copied  Save.

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Save.

Here in customized document type we can give our newly customized number ranges and field
selection.

Creation of PR:
Path:

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SAP Easy Access screen  SAP menu  Logistics  Material Management  purchasing 
purchase requisition  create (ME51N)  Enter.

1. Select your customized document type.

2. Tick source list (if you are maintained), if you activate this system will automatically
select vendor as per priority (QA – SL – Con – PIR).

HEADER LEVEL:

1. In header level we have to enter only PR text called header note.

ITEM Overview:

3. Give your material 3002

4. QTY
5. Plant
6. Account assignment category: this specifies to which consumption we are procuring
material and to be posted in GL account. If line item is required for particular user dept
for consumption then we have enter account assignment category. If we are procuring
material for stock purpose then leave this field blank and don’t enter any account
assignment category.
We can customize our own account assignment category:
Path:
SPRO  IMG  MM  Purchasing  maintain account assignment category  enter
 go to position give standard category  copy as  give your own category  save.

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 If we are maintain procuring material for stock purpose then in line item we have to give
material number mandatory, if it is for consumption then material number is not
mandatory but we have to give material group and short text.
7. Item Category: It defines how the procurement of line item as to be controlled. It as to
be determines how the item to be procured in standard process, consignment process,
sub contracting process or third party or STO process.
8. Short text has taken from material master.
9. Quantity as to be entered manually
10. Unit of measure is coming from basic data1 in material master.
11. Delivery date is taken as per given in MRP 2 from material master as field planned
delivery time.

ITEM LEVEL:

12. Material Data:

I. This data is comes from material master general data material, batch, material
group and short text.
II. Vendor material number will come from PIR it is a description of vendor and
material. If we leave blank in PIR then in PR also it will blank if required we can
maintain here.
13. Quantities/Data:
III. Quantity/ Quantity Order/ Open quantity: these are to be maintained manually
in PR.
IV. Request date/ Release Date: these dates are material requested dates.
V. Delivery Date/ Pl. Deliv. Time/ Rem. Shelf Life: this data is copied from material
master.
VI. GR Proc. Time/ Rem. Shelf Life/ Pl. Deliv. Time: these data’s are copied from
material master.
VII. Closed: if we select this indicator system will close this pr for without expecting
to create PO with this PR line item by doing this PR line item will not be
available in open PR list.
VIII. Fixed ID:

14. Valuation:
IX. Valuation price: it is a standard price copied from MM accounting view.
X. Goods receipt: whenever we received material from vendor we will do goods
receipt after inspection. If we select goods receipt here then system will
remember you to do GR for particular line item if you leave blank then system
will display as pending for GR in reports. This customization is applicable only
when you create PO with reference of PR.
XI. Invoice receipt: if we activate this here in PR for particular line then system
allow you to payment process or else system will treat it as free goods and it will
display as pending item for invoice reports, if IR is selected here but invoice is

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 not possible for this particular line item then system will not show in pending
invoice receipt.
15. Source of Supply:
XII. If you activate source determination at header level then system will assign
source for all the items automatically and this data is applicable for all the
items. If you not required source determination at header level then don’t
activate there we have to select at item level in source of supply manually.
XIII. Assign source of supply field: whenever we are creating STO process or third
party then we will have supply plant and receiving plant. In this case we have to
maintain this field mandatory.
16. Status Tab:
XIV. Order quantity: whenever this PR is generated into PO then this order qty will
be updated accordingly.
XV. Processing status: it specifies the status of PR item for which subsequent
document is created as per that it will update here automatically.
XVI. Block ID: as per standard we can block this particular transaction document for
further processing. If you block then we have maintain block text.

17. Contact person:

XVII. This tab is copied from vendor master or from material master. The basic data
like created by, changed on will be in default mode copied from system, where
we cannot edit this information.
18. Text tab:
XVIII. This data is copied from material master and from PIR. We can also maintain
here. In real time ids are created from one document to other document.
T code: SO10
19. Delivery Address:
This address can be automatically maintained or we can enter manually. It is a
plant address.

PR cannot be cancelled or we cannot delete it, only we can do park or hold the
PR.

Tables for PR:

EBAN – PR data
EBKN – PR account assignment data

T codes for PR:

ME51N – Create
ME52N – Change
ME53N – Display
ME54N – individual Release

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 ME55 – Collective release
ME5F – release reminder
ME5A – List of PR’s

ME41 – REQUEST FOR QUOTATION (RFQ)

This is the succeeding documents we can create with the help of PR, Contracts or with
outline agreement. Whenever PR is raised with new item then we will call for request for
quotations. Sending prices, Quality and conditions etc by vendor or supplier is called
quotations.

Path:
SPRO  IMG  Material Management  Purchasing  RFQ/Quotation

Steps:

1. Number ranges
2. Define document type
3. Screen layout at document level

1. Define Number Ranges

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 In real time number ranges will not be customized, it will be used standard SAP number
ranges. We can customize number ranges if it client requirement. Number ranges will be
internal as well as external same like PR.

Path:
SPRO  IMG  Material Management  Purchasing  RFQ/Quotation  Define
number ranges  enter  go to Change intervals  insert line and define internal
number range as well external  Save

2. Define Document Type

The standard document type for RFQ is “AN”.
We can copy standard document type.

Path
SPRO  IMG MM Purchasing  RFQ/Quotation  Define Document type  enter
 select standard document type “AN”  click copy as  give your own document type
 click copy all and save.

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 3. Define Screen layout at Document Level
Your screen layout will control fields in RFQ. We can hide, or we can make it optional or
required by selecting our document type.

Path

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 SPRO  IMG  MM  Purchasing  Quotation/RFQ  Define screen layout at
document level  enter  go to position  give your document type  select line and
click on details button  go to fields and select  save

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 SAVE.

Creation of RFQ:

Go to t code ME41

Path
SAP Easy Access  SAP menu  Logistics  MM  purchasing  RFQ/Quotations 
RFQ  ME41 – Create  enter.

We can create with reference to PR or outline agreement or we can create without all
these

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RFQ without PR or Outline agreement:

RFQ type, Language, RFQ date, Quotation deadline, Purchase Org, Purchase Grp, enter  give
company code  enter.

Give collective Number (It is like serial number)  click on vendor address button  give
vendor enter  give material, RFQ quantity, delivery date  enter  go to delivery address
button give address  enter  save.

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Observations:
1. When we are creating RFQ with central purchase organization system will not ask any
company code.

RFQ T codes

ME41 – Create
ME42 – Change
ME43 – display
ME44 – Maintain Supplement
ME45 – Release

List of Displays T codes

ME4L – By vendor
ME4M – By Material
MSRV4 – By service
ME4S – by collective no
ME4C – By material group
ME4B – By tracking
ME4N – by RFQ Number
MELB – transactions per tracking number

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RFQ with PR:

Go to ME41  Enter  RFQ type, Language, RFQ date, Quotation deadline, Purchase Org,
Purchase Grp, enter  click on reference to PR  give your PR number, enter  give collective
number enter  click on vendor  give vendor, Click on header details(Hat), enter  give
storage location, select line item click on Adopt+Details  click on address details  give any
address either it can be plants or any customer address etc  Adopt  Save

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 How to create Request for quotation
First we need to create a request for quotation. RFQs can be created by transaction  ME41. We
can create a new RFQ from scratch, or create one referencing to an existing purchase
requisition or outline agreement. If you want to create the RFQ using a reference document,
you will just need to click the appropriate button and enter the referencing document number.
In this case, we are creating a new RFQ with no reference document.
Step 1) In transaction ME41, enter:

1. RFQ type: quotation type (AN - standard RFQ).

2. Language key: language to be used in a quotation (EN - English).
3. RFQ date: Today’s date.
4. Quotation deadline: this date has to be before delivery date.
5. RFQ number: enter a number you want to assign to quotation (if you want it to be
assigned internally leave this field blank).
6. Purch. organization: purchase organization (e.g. 0001).
7. Purchasing group: purchasing group (e.g. 001).
8. Item category: default is blank – standard item.
9. Delivery date: requested delivery date.
10. Plant.
11. Storage location: S Loc for goods receipt.
12. Requirement tracking number.

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 ME47 – QUOTATIONS

After creating RFQ to vendor, vendor will send Quotations for requested RFQ.
We maintaining Quotations we have to go to T Code: ME47

Path
SAP easy access Screen  SAP Menu  Logistics  MM  Purchasing 
RFQ/Quotation  Quotation  ME47  Maintain  Enter  Give RFQ Number 
Enter, After enter following screen will appear here we cannot change material it is in
grey mode, but we can change Quantity and delivery date if required. Edit delivery date
and price as given by vendor and save the quotation.

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 T Codes for Quotations:

ME47 – Maintain
ME48 - Display

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 ME49 – Price Comparison
After maintaining quotation received from vendor we have to compare quotations sent by
different vendor it is called Price comparative statement.
Price comparison statement T code – ME49

Path
SAP Easy Access Screen  SAP Menu  Logistics  MM purchasing  RFQ/Quotation 
Quotations  ME49 Price Comparison  Enter  give Purchase Organization, Quotation
number, select include discounts & include delivery costs  Execute

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After comparison we will finalize vendor after that we will send an acceptance letter to selected
vendor and rejection letter to unsuccessful bidders as business approach.

ME21N – PURCHASE ORDER

Purchase order is a legal document created by a Purchasing dept. It is a source of document
thru which we procure material from vendor or supplier. PO can be created manually or
automatically. PO is also called ORDER.

Possibilities for Creating PO:

PO can be created with following references:
a. PR
b. Scheduling Agreement
c. Outline Agreement
d. PIR
e. Contracts
f. RFQ, Etc.

If we are creating PO for stock purpose then we have to give material mandatory, if we
are creating for consumption material is optional entry but we have to give Material
group.

IMG settings for PO:

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 1. Define Number Ranges:
We can have either external number or internal number range; it is same as like PR.
If we want maintain exclusively number ranges for our PO document type we have
to go to following path.

Path
SPRO  IMG  Material Management  Purchasing  Purchase Order  Define
Number ranges  Enter  click on intervals  Insert line n enter internal number
range and external number  save.

T code : OMH6

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 In real time PO can be raised by different dept in organization like Purchasing dept, sales dept,
inventory dept, storage dept etc, depending upon their nature of business they will maintain
number ranges.

2. Define Document Types:

Standard document type for Purchase order is NB We can also customize our own
document type by copying standard document type.

Path
SPRO  IMG  Material Management  Purchasing  Purchase order  Define
Document type  enter  go to position  give standard document type  click
on standard DT select copy as button  give your own document type  save.

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 Select your newly defined item category click on allowed item category, we you
don’t have any item category we have to enter manually.

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  Click on link for PR for document type click on item category standard  double
click check your document type.

3. Define Screen Layout at Document level:

Path:
SPRO  IMG  Material Management  Purchasing  Purchase order  define
screen layout at document level  enter  go to position  give standard SAP
screen layout NBF  Click on copy as  give your own screen layout  enter 
save.

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 SAVE.

4. Text for Purchase order:

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 In real time we can maintain texts at header level and also in item level depends on
client requirement.
I. Define texts at header level:
In real time we have two types of requests:
1. Functional request: if we are doing any customized within standard SAP without
taking any help of technical consultant then this is known as functional request.
We create functional request in development server system will generate TR
number (Transport request number). This TR number should move from one
client to another client within a server for testing purpose these request called
Client Independent.
2. Whenever we are customizing other than SAP standard then system will
generate TR umber this will moved to all the clients within a server automatically
this is called client dependent. Whenever we are customizing other than
standard then it is called technical request.

5. Creation of Purchase order:

PO is been created by END user or from client side in Easy access screen. Before 4.6
versions we have to create PO in T code ME21 and ME27 for Third Party after 6.0
versions SAP customized new t code ME21N, N is a enjoy transaction we can
navigate from one master data another or to other transaction data with the help of
enjoy transaction.

Notes:
1. Any purchasing document like PR, RFQ, PR, Contracts in combined with header
data and item data.
2. Vendor can be determined from QA – SL – Contracts or from PIR but you have
maintain vendor manually maintain vendor number if your creating PO manually
or else if it is creating automatically system will fetch data from
PR/Sales/Production order.
3. If we are creating PO from RFQ then system will take vendor from RFQ.
4. If we have no of line items for those line items we have not mentioned PIR then
we have to vendor manually at header level mandatory.

Path:
 SAP menu  easy access screen  logistics  Material Management  purchasing
 purchase order  Create  ME21N  Enter  give your customized document
type PNB , enter vendor(Mandatory). Document date always will be today’s date

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 enter  give purchase organization, purchase group and company code  enter 
Now give your material  after entering material system will ask for plant give your
plant 

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 Tabs from Header Data:
1. Delivery/Invoice:
I. Payment terms: This data will come from vendor master. If required we can
edit over here.
II. Inco Terms: This data will come from vendor master. If required we can edit
over here.
III. Currency: system will take currency from vendor master.
IV. Exchange rate: If vendor currency is different from company code currency
then we have to maintain exchange rate for price calculation. We can
maintain exchange in T code OB08.
V. Exchange rate fixed: if you tick this here exchange rate will not change for
line items also. In real time don’t tick this.
VI. GR message: If you activate this here then after creating PO mail will
generate to vendor and to SAP inbox this is just for information purpose.
2. Conditions Tab:
We have different type of conditions header condition and item level condition.
Header level condition is applicable to whole PO document and item level is
applicable to that particular line item, this we will discuss in condition master
data.
3. Text Tab:
We will get this data from text types created in SO10. This data are also comes
from RFQ we are not created in RFQ then we can enter manually.
Path: SO10

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 SPRO  IMG  Material Management  Purchase Order  Texts for Purchase
order  define texts types for header texts  enter  click on new entry  give
serial number and text save.

4. Address Tab:
All these data is copied from vendor master from VM to RFQ to PO, if we are
creating PO without RFQ then system will copy data from vendor master.
5. Communication Tab:
This is vendor communication details copied from vendor master.
6. Partners Tab:
Define partner functions and assign to document type of purchasing document,
in this system will take partner functions if you assigned to document type.
Creation of partner functions and assigning to document type:
Path:
SPRO  IMG  Material Management  Purchase order  Partner
determination  Partners setting in purchasing document  define partner
scheme  enter  go to new entries create partner schema  save, after
saving click on created partner schema select that line and go to partner function
in procedure enter partner functions and save.

Assign Partner schema to Document types:

Path:
SPRO  IMG  Material Management  Purchase order  Partner
determination  Partners setting in purchasing document  Assign Partner

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 schema to Document types  enter  go to position give your document
type  give your partner schema and save.

7. Additional Data:

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 Here we can maintain start date, end date and collective number of RFQ, it is an
optional entry.
8. Organization data:
After entering into PO creation document system will ask 1 st Org data like
Purchase org, Purchase group and Company code without entering this system
will not allow you to enter line item.
9. Status Tab:
This tab will show the current status PO, whether fully invoiced or partial
invoiced, how much delivered pending quantity and moreover it shows Down
payment.
10. Payment Processing Tab:
This tab is applicable for retention and down payment purpose.

Tabs from Item Data:

1. Material Data:
This data is independent to each and every line item.
I. Material Group: This data is copied from PIR.
II. Vendor master Number: this data is copied from PIR. This is vendor old
material number rather than SAP number.
III. Vendor Sub-range: this data is copied from PIR or vendor master
accounting group.
IV. Batch/EAN/UPC/Revision level: this data will be copied from Material
master basic data 1.
V. INFO update: if we activate this indicator here system will create new
info record for particular material and vendor if they don’t have info
record. It will create PIR with basic data system will not generate net price
& pricing condition type from PO we have to enter manually.
2. Quantity/Weight: this data will fetch from PIR & Material master.
3. Delivery Schedule tab:
I. Delivery date: this data will be copied from PIR based on planned delivery
time.
4. Delivery Tab:
II. Overdeliv. To/ Underdel. To/ Shippg Instr/ 1st Rem./Exped/ 2nd
Rem./Exped/ 3rd Rem./Exped./ Pl. Deliv. Time/ Rem. Shelf Life/ : this all
data are copied from PIR. If we required we can change here
III. GR Processing time: this data is copied from material master purchasing
data, if required we can change here.
IV. Stock type: we have different types of stock they are
a. Unrestricted stock
b. Blocked stock
c. Quality inspection stock.
Unrestricted stock is uses for stock which can be used by regular usage.

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 Blocked stock is might be blocked for particular dept or consumption
usage etc. Quality Inspection stock is the stock received from vendor and
inspection pending after inspection it moves to unrestricted storage.
V. Delivery Completion: if you activate this & GR is entered with partial
quantity next time we cannot be used for further process for this particular
line item. While creating PO if you don’t activate this option then after
receiving full PO then system automatically activates this check.
VI. Latest GR date: it is a last date for accepting goods from vendor if we do GR
after this date system will throw warning message or error message.
VII. QA Control Key: Key that controls the quality inspection process for the
material within the QM system.
5. Invoice Tab:
I. Invoice receipt: if we activate this here in PO for particular line then
system allow you to payment process or else system will treat it as free
goods and it will display as pending item for invoice reports, if IR is
selected here but invoice is not possible for this particular line item then
system will not show in pending invoice receipt.
II. Final Invoice: if you set this indicator system will treat as last entered
invoice is final invoice for this PO line item it will not expect any further
invoices.
III. GR Based Inv/ERS: if you set this indicator system will evaluate vendor
invoice, based on GR quantity IR will be created if IR quantity is more than
GR quantity system will throw you an error.
IV. Tax Code: we have to define tax code from FI settings for tax calculating
at the time of IR. We have 2 types of taxes input tax and output tax. Input
is for MM and output is for SD.
Define tax Code:
6. Conditions Tab: this tab will come from condition master data.
7. Texts Tab: this data will fetch from PIR and we can also maintain in IMG settings.
Header level text is applicable to whole; we can maintain text to each and every
line item.
8. Delivery Address: system always takes plant address as delivery address if we
want we can change the address here.
9. Confirmations tab:
I. Acknowledge required: this data will directly come from vendor master if
we activate this acknowledge in PO print out it will show.
II. Confirmation Control: if you maintain this whenever we raise PO vendor
has to send confirmation about material delivery notifications called
shipping notifications or ASN by this production team get ready for
production. We can check this in T code MD04.
if we maintain Confirmation control we have to create inbound delivery in t
code VL31N, without inbound delivery we cannot create GR.
10. Condition Control:

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 I. Print Price: if you want price on your output activate this print price, if
you don’t required price on your output then deactivate this.

After entering all these data check the document if everything ok then go to
output setting for print output.

How to give Printout for PO settings:

Click on message button in PO  give following details
OUTPUT – NEU
Medium: 1 print output  enter after entering system automatically it will take
partner function  language  select the line item  click on communication
method  give logical destination as LP01 this is common for practice , click print
immediately and release after output  back  back  click on print preview
 save the PO.

T codes for Purchase Order:

ME21N - create PO vendor plant known
ME22N – Change PO
ME23N – display PO
ME25 - create PO vendor Unknown
ME59N – create PO automatically via PR.
ME28 – Collective PO release
ME29N – Individual PO release

Tables for Purchase Order:

EKKO – PO header data
EKPO – PO item level data

Fields for Purchase Order:

EKORG – Purchase Organization
EKGRP – Purchasing group
EBELN – Purchasing Document
VBTYP – Purchasing document category
ZTERM – payment term
KTOKK – vendor account group
MATKL – material group

Observations:
 Purchasing group will be different from header data to item data.
 Link between company code and purchase organization will come from vendor
master.
 In PO whatever data comes in header level it will come from vendor master.
 Currency will take from vendor master in purchase order, but while doing
account settlement currency will take from company code.
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  Whenever we are giving ASN’s system will ask for inbound delivery for posting
GR.

INVENTORY MANAGEMENT
Inventory management deals with movement of goods from one place to another place or
from one storage location to other location etc. IM has GR & GI.
IM deals with managing materials in warehouse whenever we procure materials from
vendor we will store those material warehouse or storage location in the form of value
basis or quantity if not we cannot create inventory management. In SAP for materials
inventory is required or not is controlled by material type and valuation area level.

1. Path to maintain valuation area & material type for value and quantity update:
SPRO  IMG  Logistics general  material master  basic settings  material types 
define attributes of material type  enter  go to position  give your material type 
select your material type  click on quantity/value updating  go to position  give your
valuation area  tick quantity & value update  save.

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 If you tick both then procured stock is for stock purpose whenever you create PO no need
to give account assignment category. At GR/GI, IR levels always accounting documents will
be generated whenever you post, issue the stock or valuate the stock.

PO/PR – quantity update

GR – Value update

2. Settings for inventory management:

Path:
SPRO  IMG  Material Management  Inventory management and Physical inventory 
plant parameter  enter  go to new entries  give your plant  enter and activate
following check boxes  back  save.

1. Create storage location automatically: if you activate this if you don’t maintain storage
location to plant system will create new storage location when the time of GR.
2. Alternative unit: this will be used at Warehouse management.
3. Movement allowed: we have to maintain this because movement of goods from one
storage location to other or from one plant to other plant.
Negative stock: whenever we create a PO vendor will deliver goods to our premises in
the meantime production team or storage team can raise stock issue or goods issue

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 without having ordered stock in the storage location. This can be achieved thru Negative
stock following the sub divisions of negative stock:
4. Vendor consignment goods
5. RTP stocks
6. Stock of material allowed
7. Customer consignment
8. Return pack at customer
9. Sales order stock
10. Project stock

3. Maintain Plant Parameter:

Path:
SPRO  IMG  Material Management  consumption based planning  Plant
parameter  carry out overall maintenance of plant parameter  enter  click on
create button  give your plant  create  save  click on maintain button on same
path  give your plant  maintain.

Goods Movement:
We have different types of goods movement:
1. Goods receipt
2. Goods issue
3. Stock transfer
4. Stock posting etc

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 Results of Goods movement:
1. At least one material document will be generated if movement is relevant to IM and
accounting entries will be generated.
2. Stock value & consumption value may increase or decrease.
3. Total stock, total value and moving price may increase or decrease based on goods
movement.

Difference between GR and GI:

S NO GR GI
1. GR will be done with reference to PO GI will have done with reference to
sales order, inbound delivery or
without these transaction data

2. GR can be determined with any GI can be determined with reference

material type to sales order material type

3. GR can be done with reference to GI can be done with same process.

production order, sales order and also
others

Effects of Goods Receipts:

Delivery MM (stock & Val Update)

Material document
PO history update
Goods Receipt
QM creation of Inspection lot to
trigger quality inspection

Stock & consumption

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Ware house
Documents for goods movement:

Receipts Goods Movement Withdrawals

Material documents Stores Accounting documents

Movement Type Controls:

 It is an identification of each and every material movement controls the mechanism of

goods. It is characterized with 3 digits.
 SAP as already given standard movement types for regular usage in real time we will use
standard movement types but if client requirement is not matching then we have to
customize as per client requirement.
Settings for inventory management:
4. Define number assignment for accounting documents
Path:
 SPRO  IMG  Material Management  Inventory management and Physical
inventory  Number assignment  define number assignment for accounting
documents  enter  click on goods receipt document type  go to position  give
your transaction code (MIGO)  document type is WE  back, click on goods issue
document type  go to position  give your transaction code(MIGO) enter 
document type is WA.
 The standard document type for GR is WE.
 The standard documents type for GI is WA.

Go back click on financial accounting document type  go to position  give your

document type WE  enter  select WE line go to details button  number ranges for
WE is 50.

WE Document type control:

1. Assets

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 2. Customers
3. Vendors
4. Materials
5. G/L accounts
6. Negative posting
7. Intercompany posting

Go back  go to position  give your document type WA  enter  select WA line

go to details  number range is 49.
WA Document type control:
1. Assets
2. Customers
3. Vendors
4. Materials
5. G/L accounts
6. Negative posting
7. Intercompany posting

5. Define number ranges financial accounting

This is company code based.
Path:
SPRO  IMG  Material management  inventory management and Physical
inventory  number assignment  define number ranges for accounting assignment 
click on financial accounting number ranges  give your company code  click on
intervals  add new line give No., year and from and to number ranges and save.

T code : FBN1

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 Save.
6. Define number assignment for material and physical inv docs.
T code OMBT.

7. Field Selection for Goods movement initial/Header screens:

Path:
SPRO  IMG  Material management  Inventory management and physical
inventory  Field Selection for Goods movement initial/Header screens  enter 
here we can maintain hide, optional, required etc.  save.

T code for screen layout for goods movement is OMJN

8. Settings for Enjoy transaction:

Here we can manage field’s settings in MIGO.
Path:
SPRO  IMG  Material Management  Inventory management and Physical
inventory  settings for enjoy transaction  settings for goods movement  field
settings for MIGO  enter  here we can maintain fields we can hide, optional or
required etc and save.
T code : OMJX

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CREATION OF GOODS RECIEPT (GR) - MIGO

GR will be done by client side please go to following path for GR

Path:
Easy access screen  SAP menu  logistics  material management  inventory
management  goods movement  MIGO  enter.
Give transaction/event (A01 – Goods receipt) , Reference document ( R01 – Purchase
order)  give PO number  enter 

Whenever we give confirmation control in PO as ASN then we have to create

inbound delivery then system will allow you to create GR or else system will not
allow you to create GR.
T code for inbound delivery – VL31N
Go to VL31N  give plant, Purchase order and delivery date  enter  go to stock
placement  give storage location and put away qty and save the document.

After creating inbound delivery automatically system will update confirmation

control in PO.

After inbound delivery now system will allow you to create GR  movement type GR
– 101  enter  we have 2 types of data header and item level data.

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 Header Level:
1. General Data:
 Document date and posting dates are always current date.
 Print active always 1 individual slip
 Delivery note details of vendor goods delivery
 Bill of lading: whenever goods are importing we have to give bill of lading
number here which is issued by customs.
 Vendor: here vendor will come automatically from PO who is supplier of
goods.
 Header Text: here we can maintain any text to storage location if
required.
2. Vendor data:
 Here we will get only supplying plant.
Item Level:
1. Material:
 Here material number, material group will come from Material master.
 Vendor material number if you maintained this in PIR then it will come
here or else in PO also.
 EAN will come from material master
2. Quantity:
 Qty in Unit of Entry is a order unit.
 SKU: stock keeping unit the unit maintained in stores. It may be same as
basic unit of measure
 Qty in Delivery Note: this the quantity delivered by vendor.
3. Where Tab:
 Movement type will come from header data.
 Stock type this will come from PO.
 Plant it is a supplying plant, it will come automatically we cannot change
here because already we have given this plant in PO.
 Storage Location: here we have to maintain same storage location what
we have given in inbound deliver.
4. Purchase Order Details:
 Everything will come from PO
 Delivery completed indicator: set automatically.
5. Partners:
 This data automatically will come we cannot change here.

After entering above all details click tick on ITEM OK  check  if system gives error “Account
determination for entry INT BSX 0001 ___ 7920 not possible”

Movement Types:
Goods Receipt – 101

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 Reversal – 102
Vendor goods return – 122
Goods issue – 601
GI Reversal – 602
GI reversal return – 651

Logistics Invoice Verification

Every organization acquires goods or services to complete its business needs. Once goods are
procured from vendor and placed in company’s premises through goods receipt then we need
to pay to vendor for acquired goods and services. The amount to be paid along with details of
material is provided by vendor in form of document that is known as invoice. Before paying to
vendor we need to verify the invoice. This process of verifying invoice and paying to vendor is
known as invoice verification.

The key points about invoice verification are as follows.

 Invoice verification marks the end of procurement after purchase order and goods
receipt.
 Invoice posting will update all related documents in financial and accounting.
 Blocked invoice that vary from actual invoice can be processed through invoice
verification.

Invoice verification deals with the following terms which are as follows.
1. Posting of Invoice
2. Blocked Invoice
3. Evaluated Receipt Settlement (ERS)

Posting of Invoice
Posting of invoice is done after goods are received from vendor and goods receipt is done.
Invoice received from vendor is verified against cost, quantity and quality by ordering party and
then invoice is posted against that purchase order. So, this is the phase in which the vendor
Seller is paid from the company and reconciliation of the invoice and PO is accomplished.
Invoice can be posted by following the below steps.

Path to post Invoice:

Logistics => Materials Management => Logistic Invoice Verification => Document Entry => Enter
Invoice
Code: MIRO

On SAP Menu screen select Enter Invoice execute icon by following the above path.

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Fill in all necessary details like invoice posting date, amount that is paid to vendor along with
Quantity for which amount is paid. Click on save. Invoice is now posted for the goods receipt.

Blocked Invoice

Sometimes accounting department is unable to pay the invoice to vendor. This may happen
when you try to post an invoice, system expect certain default value against purchase order or
goods receipt and posted invoice differs from default value. This may lead to invoice blocking.
Some of the reasons for invoice blocking are as follows.
 Variance in amount at item level

 Variance in quantity at item level

It is also difficult to analyses the small variances in invoice. So, tolerance limits are set up in the
System and if variance in invoice is within the tolerance limit then system accepts the invoice. If
Variance limit is exceeded then it may lead to blocking of invoice. Then we need to manually
Unblock or release that invoice if we want to process the invoice. Invoice can be unblocked by
Following the below steps.

Path to Release Blocked Invoice:

Logistics  Materials Management  Logistic Invoice verification  Further Processing 

Release Blocked Invoice
TCode: MRBR

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On SAP Menu screen select Release Blocked Invoices execute icon by following the above path.
Provide the necessary details like company code, invoice document number, vendor, posting
date, purchasing group. Then select execute icon. Blocked invoice will be released.

Evaluated Receipt Settlement (ERS)

ERS is an easy method of settling goods receipt automatically. If ordering party has agreed with
vendor on all financial terms and condition, then ordering party need not verify the invoice.
Invoice will be posted automatically from the information present in purchase order and goods
receipt. The various advantages of ERS are as follows.

 Purchase orders can be settled and closed quickly.

 It reduces human efforts as no need to verify the invoice.
 Amount and quantity variances in invoice can be avoided with the help of ERS.

To implement ERS some mandatory setting needs to be done in vendor master which is
described in below context.

Go to XK02 (Change mode of vendor). Select Control data tab. Check the AutoEvalGRSetmt Del.
And AutoEvalGRSetmt Ret box. Click on save. Now the particular vendor is enabled for ERS.

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ERS can be created by following the below steps.
Path to create ERS:
Logistics => Materials Management => Logistic Invoice verification => Automatic Settlement =>
Evaluated Receipt Settlement
TCode: MRRL

On SAP Menu screen select Evaluated Receipt Settlement execute icon by following the above
path. Fill in all necessary details like company code, plant, goods receipt document number and
date, vendor, purchasing document. Click on save. ERS will be created for the corresponding
purchase order and goods receipt.

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