Master data in SAP MM

What are the different Types of Master data in SAP MM?

The Master data in SAP is used to be base data that can store all the required inform about the transaction. If someone producing, transferring stock, selling, purchasing, doing physical inventory it necessary to maintain some data that includes material master data,vendor master data and purchasing master data.The below post we are going to discuss the information of different types of master data in sap mm.

Material master data, The basic details on materials an enterprise procures externally or produces in-house. The unit of measure and the description of a material are examples of the data stored in a material master record. Other SAP Logistics components also access the material data.

The material master database (often referred to simply as the “material master“, and comprising all the individual material master records stored in the system) contains descriptions of all materials that an enterprise procures, produces, and keeps in stock. It is the central repository of information on materials (such as inventory levels) for the enterprise.

The integration of all material data in a single materials database eliminates the problem of data redundancy and permits the data to be used not only by Purchasing, but by other applications (such as Inventory Management, Materials Planning and Control, Invoice Verification, and so on).

Vendor master data called as Information about external suppliers. The vendor’s name and, the currency the vendor uses, and the vendor number (stored in the SAP system as an account number) are typical vendor data.

The vendor master database contains information about the vendors that supply an enterprise. It consists of a large number of individual vendor master records, each containing the relevant vendor’s name and address as well as data such as:

• The currency used for ordering from the vendor
• Terms of payment
• Names of important contact persons (sales staff)

In Accounting, the vendor represents an account payable, the vendor master record also contains accounting information, such as the relevant control account (reconciliation account) in the general book keeping system.

Therefore, the vendor master record is maintained by both Accounting and Purchasing.

Purchasing master data, such as the following:
Purchasing info record establishes the link between material and vendor, thus facilitating the process of selecting quotations. For example, the info record gives the unit of measure used for ordering from the vendor, and indicates vendor price changes affecting the material over a period of time.

Source list, The source list specifies the possible sources of supply for a material. It shows the time period during which a material may be ordered from a given vendor.

Quota arrangement, specifies which portion of the total requirement of a material over a certain period is to be assigned to particular vendors on the basis of quotas.

This section provides an overview of materials planning and control and shows how the latter affects the purchasing activities in the SAP system.

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Release Procedure for Purchase Requisition in SAP MM

This post describes the release procedure for requisitions in Purchasing. This topic “release” means giving approval, or clearance, to go ahead with the procurement of the materials or services set out in the requisition, and should not be confused with the issuing of orders against longer-term purchase agreements.

The topic discusses how the release (approval) of purchase requisitions is controlled, how you can determine who must release (approve) a purchase requisition, and how a purchase requisition is actually released (approved). In this topic within the Purchasing, there are two procedures for releasing purchase requisitions,

Release procedure 1 (without classification)

Release procedure 2 (with classification)

To Explain Release Procedure 1
 
This procedure serves as a correction and approval procedure for purchase requisitions. Its aim is to check the data on material, quantity, and dates for accuracy and ensure the correctness of the specified account assignment and source of supply. Purchase requisitions are released on an item by item basis.

For example, suppose strategy S1, which is assigned to requisitions with a face value of more than $10,000, requires approvals as shown in the following table.

Release prerequisites in the case of release strategy S1

Release procedure for Purchase Requisition in SAP MM

Strategy –  Release point, Strategy

Prerequisites -S1

1 – Project manager – None

2 – Department manager- None

3 – Cost center manager-  1, 2

4 – Controller- None

5 – CEO-1, 2, 3, 4

In addition, the following release prerequisites apply for release strategy S1:

Release points 1 – 4 must release a requisition before it is released by the CEO (release point 5).

Release point 4 may release at any time, but before release point 5.

After a requisition is released by release points 1 – 3, Purchasing may issue RFQs to potential vendors.

This procedure is only available for purchase requisitions.

What is Release procedure 2

The aim of this procedure is to replace manual written authorization procedures using signatures by an electronic one, while maintaining the dual control principle. The person responsible processes the relevant document in the system, thereby marking it with an “electronic signature” which can give the document legal force. A purchase order contains an item relating to 1,000 pieces of Steel 1 for plant 2.

The material belongs to the material class Metal 05. The item has a value of 15,000 dollars. As soon as the item has been entered, the system passes on the field contents from MM Purchasing to MM Classification in a communication structure. Classification first selects the relevant characteristics and then checks the characteristic values.

For example, let us assume that the Classification System has been set up as follows: System settings for 01-S4 (Group 01, purchase order, strategy S4)

Characteristic – Characteristic value

Plant  1, 2, 3

Material class – Metal 1

Value > $12,000

This means that the characteristics plant, material class, and value of item are relevant for the determination of the release strategy for purchase orders. The system determines the release strategy S4 on the basis of the characteristic values.

This procedure is available not only for purchase requisitions but for all other purchasing documents as well. Release on an item-by-item basis is only possible in the case of requisitions, not in the case of the other purchasing documents.

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Outline agreement in SAP

This post explains general background information on the “outline agreements” (which, outside the SAP System, may also be referred to as blanket, master, framework or umbrella agreements) that are used in the SAP MM Purchasing component. In basic Outline Agreement can be classified with 2 different types. Contract and Scheduling agreements.

Contract is nothing but where you can have contract with the vendor,and this might be predetermined quantity. For example whenever you need the material the you need to make PO reference to this contract and asking for the delivery of the material.

Scheduling agreement is nothing but long term purchase agreement, where you can keep issuing the delivery schedules whenever there is change in requirement or predetermined time intervals. We can classify the delivery schedule on hour or daily or weekly or monthly basis.

An outline agreement is a longer-term arrangement with the vendor regarding the supply of materials or the performance of services according to predetermined terms and conditions. In MM Purchasing, such agreements are subdivided into “contracts”and “scheduling agreements.” Outline agreements may be subject to a release (approval or clearance) procedure.

To Create Contract following the below steps:

Path to create Contract:
Logistics => Materials Management => Purchasing => Outline Agreement => Contract => Create
Transcation Code: ME31L

The Structure of an outline agreement

As in the case of other purchasing documents, an outline agreement consists of the following elements:

Document header:

• It contains information specific to the entire agreement.
• For example: the vendor information and header conditions are in the document header.

Items:

• Items that contain the information specific to the material or service. For example:
• Statistics on ordering activities for the item
• Quantity or price of the item
• Pricing conditions, such as quantity discounts and surcharges

Texts in outline agreements

You can create your own texts from scratch in an agreement or change a text that has been suggested by the system. There are two kinds of agreement text: header text and item text. The texts are further subdivided into text types, for example, shipping and delivery instructions. The text type determines the print sequence on the document printout.

Outline agreement is nothing but long term purchasing agreement with vendor in containing certain terms and conditions regarding the raw material that is supplied by the vendor. Outline agreement which is valid up to certain period of time with some predefined quantity or value.

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SAP ERP: Technosap

SAP ERP is enterprise resource planning software developed by the German company SAP SE. SAP ERP incorporates the key business functions of an organization. The latest version (SAP ERP 6.0) was made available in 2006. The most recent Enhancement Package (EHP7) for SAP ERP 6.0 was released in 2013.

Business Processes included in SAP ERP include Operations (Sales & Distribution, Materials Management, Production Planning, Logistics Execution, and Quality Management), Financials (Financial Accounting, Management Accounting, Financial Supply Chain Management) and Human Capital Management (Payroll, e-Recruiting)

Development

SAP ERP was built based on the former SAP R/3 software. SAP R/3 through version 4.6c consisted of various applications on top of SAP Basis, SAP's set of middleware programs and tools. When SAP R/3 Enterprise was launched in 2002, all applications were built on top of the SAP Web Application Server. Extension sets were used to deliver new features and keep the core as stable as possible. The Web Application Server contained all the capabilities of SAP Basis.

As a result of marketing changes and changes in the industry, new versions of SAP have been released. The first edition of mySAP ERP was launched in 2003 and bundled previously separate products, including SAP R/3 Enterprise, SAP Strategic Enterprise Management (SEM) and extension sets. The SAP Web Application Server was wrapped into NetWeaver, which was also introduced in 2003.

A complete architecture change took place with the introduction of mySAP ERP edition in 2004. R/3 Enterprise was replaced with the introduction of ERP Central Component (SAP ECC). The SAP Business Warehouse, SAP Strategic Enterprise Management and Internet Transaction Server were also merged into SAP ECC, allowing users to run them under one instance. Architectural changes were also made to support an enterprise service architecture to transition customers to a services-oriented architecture.

ERP advantages and disadvantages

Advantage

• Allows easier global integration (barriers of currency exchange rates, language, and culture can be bridged automatically)
• Updates only need to be done once to be implemented company-wide
• Provides real-time information, reducing the possibility of redundancy errors
• May create a more efficient work environment for employees
• Vendors have past knowledge and expertise on how to best build and implement a system
• User interface is completely customizable allowing end users to dictate the operational structure of the product

Disadvantages

• Locked into relationship by contract and manageability with vendor - a contract can hold a company to the vendor until it expires and it can be unprofitable to switch vendors if switching costs are too high
• Inflexibility - vendor packages may not fit a company's business model well and customization can be expensive
• Return on Investment may take too long to be profitable
• Implementations have a risk of project failure 

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SAP Purchasing info Records Types: Technosap

The purchasing info records is source of information for purchasing. It contains information on a specific material and a vendor supplying the material. For example, the vendor’s current pricing is stored in the info record. The purchasing info records referred to in abbreviated form as called Info record.

Types of SAP Purchasing info records, There are two types of info records available in sap

Info records with a material master record (e.g. for stock material), This type of info record represents the relationship between a material or service (for which a master record exists) and a vendor.

Info records without a material master record (e.g. for consumable materials), This type of info record represents the relationship between a material or service for which no master record exists and a vendor.

Sucontractor info records
A subcontractor info records contains ordering information for subcontract orders. For example, if you subcontract the assembly of a component, the subcontractor info record would include the vendor’s (subcontractor’s) price for assembling the component.

Pipeline info records
The pipeline info record contains information on a vendor’s commodity that is supplied through a pipeline (for example, oil or water) or via similar means (for example, electricity through the mains). The info record contains the vendor’s price for the consumption of such commodities by the buyer (“pipeline withdrawals”). You can store withdrawal/usage prices for different validity periods.

Structure of an info records
An info record contains general data and organizational data:

General data -Data that is valid for each purchasing organization or each plant (for example, origin data, reminder levels, and the order unit). Organizational data – Data such as prices and pricing conditions that you can store for the relevant purchasing organization or plant.

Texts in the info records
The info record contains the following text types: Info record memo.. An internal note that is adopted in the PO item. The info record memo is not printed out

PO text in info records
This text serves to describe the order item and corresponds to the PO text in the material master record. It is adopted in the PO item and included in the printout.

Short text
For material that has a material master record, the short text (short description) is copied directly from the material master record into the PO or the outline purchase agreement.

Purchasing info records stores information on the material and vendor supplying the material. For Example, vendors present price of particular material is stored in info record. Purchase info record can be maintained at plant level or other end its at purchasing organization level.

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SAP SD Online Training Tutorials

Free SAP SD (Sales and Distribution) Training Tutorials

SAP SD ( Sales and Distribution ) Training tutorials by the real time functional consultant and experts . The SAP SD module handles all the processes starting from an Order to delivery. The main operations of this SAP SD module handle Customer Sales Orders processing, pricing, Picking, packing, Shipping, billing and risk management etc.

Sales and Distribution (SD) is one of the core and most-used modules of SAP R/3 products beside Financial (FI), Controlling (CO), Material Management (MM), and Production Planning (PP) modules. The Sales & Distribution (SD) module consists of various components also called sub-modules. Which are follow as below,

(SD-BF) Basic Functions and Master Data in SD Processing. (Also subdivided in several components as: Pricing, Output…etc)
(SD-BF-PR) Pricing and Conditions
(SD-BF-EC) Extra Charge
(SD-BF-CM) Availability Check and Requirements in Sales and Distribution Credit and Risk Management
(SD-BF-AS) Material Sorting
(SD-BF-OC) Output Determination
(SD-SLS) Sales
(SD-SLS-OA) Scheduling Agreements for Component Supplierssap sd training tutorials
(SD-SLS-OA) Customer Service Processing
(SD-FT) Foreign Trade/Customs
(SD-BIL) Billing
(SD-BIL-IV) Payment Card Processing
(CAS) Sales Support: Computer-Aided Selling
(SD-EDI) Electronic Data Interchange/IDoc Interface
(LE-SHP) Shipping
(LE-TRA) Transportation
(SD-IS-REP) Reports and Analyses

SAP SD (Sales and Distribution) module and with the sub module are

• Pre-sales activities, including Inquiry and Quotation creation.
• Sales Order processing, including Sales Order (SO)
• Shipping, including Outbound Delivery document creation.
• Billing, including Billing document and invoice creation.

Sales and Distribution (SD) is a module highly integrated with other SAP Modules as FI, CO, MM, PP & more. This can make SAP SD complex module, so as part of this Introduction we will also try to detail a normal sales process and how the activities integrate and are covered by this module.

Pre-sales activities: It starts when a customer or a prospect requests information by any source about a product or service offered by the company. This request is processed through SAP and the first integration we have is by the creation of an Inquiry Document or a Quotation Document. At this point of the process we still haven’t effectively made a sale that’s why it is considered as a presale activity.

Sales Order processing: Our quotation document previously created is send to our customer so they can make effective their purchase procedure. At this point they may want to negotiate payment terms, price, dates or any adjustments to the original document created by us.

As soon as we receive a Purchase Order (PO) from our Customer we create a Sales Order (SO) which makes reference to the previously created Quotation Document. Now scenario  is adjusted based on the business requirements. In some cases depending on the business Sales Orders (SO) can be made without a previously created quotation document as also in other scenario this can be a requirement.

Inventory Sourcing: The product requirement from the Sales Order at the required date needs to be available by one of the following options:

To fulfill the products requirement from an SO at the required date, we can obtain them by one of these options:

• Taking from Available stock at warehouse. At this point the SD module may trigger stock transfers between warehouses.
• Triggering a production order to produce the products in-house.
• Triggering a purchasing order to purchase the products from vendor.

Here is where the integration between Production Planning (PP) and Material Management (MM) starts.

Shipping: When the product we sold is available at the warehouse, the sales personnel can start shipping activities by creating an outbound delivery document (Delivery Order/DO). Now this Deliver Order (DO) can be created by referring to our original Sales Order (SO). This will trigger the preparation of the product by the personnel of the warehouse. If the Warehouse Management (WM) module is integrated, a Deliver Order (DO) can trigger a Transfer Order. When the products are ready to be sent, the warehouse personnel will post the Goods Issue (GI) transaction that refers to the DO. The GI transaction will reduce the inventory level of products and then the warehouse personnel sends the products to the customer by transportation mode that has been determined in Sales Order (SO) document.

Billing: This whole process will be managed before the delivery date specified in the Sales Order (SO) document. The finance department will generate a billing document and send an invoice form to the customer. The invoice will request the customer to pay the products we have sent at the price condition and terms of payment we have agreed in SO document.

SAP Sales and Distribution consists of all business processes required in selling, shipping the goods, and final billing of the item. This SAP SD module is closely integrated with other SAP Modules.

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How to Explain Output determination Procedure in SAP SD?

Output determination Transaction code : (NACE T-code)

Output is a form of media from a business to one of its business partners. The possible media forms are printouts, faxes, telexes, e-mails, and EDI. The output can be sent to any of the partners defined in the document. Outputs are usually in the form of order confirmations, delivery notes, invoices, and shipping notifications.



Output determination to maintain 8 activities

A. Sales Activities

B. Sales document’

C. Deliveries

D. Picking lists

E. Shipping units

F. Groups (type of collective processing_

G. Shipments

H. Billing Document

1. Maintain Condition Table

2. Access Sequence

3. Output Type

BA00-Order Confirmation

1. In condition type in general record assign the access sequence

2. Here one can do setting either access sequence should purpose from condition record or customer master records

3. One can set here business partner SP, BP, Ship to party etc. Screen :

Default values

4. Assign Output Types To Partner Functions

Specify a previously defined output type. Specify the allowed partner functions. Define an output medium (for example, printout, telefax, or mail).

5. Maintain Output Determination Procedure

6 Assign output Determination Procedure

Sales order confirmation

1. Maintain output types (Transaction: V/30 or Sales & Distribution -> Basic Functions -> Output -> Output determination -> Output proposal using the condition technique -> Maintain output determination for sales document -> Maintain output types)

1.1. Select and copy BA00 to ZA00

1.2. Access sequence 0003 (Sales org / customer). If one of these is not suitable then you need to maintain condition tables

1.3. Change Transm. Medium to 6 (EDI), partner function SP (Sold to), Time (4 = immediate)

1.4. Check access to conditions and check off multiple issuing

1.5. Save

2. Assign output determination procedure (Transaction V/47 or Sales & Distribution -> Basic Functions -> Output -> Output determination -> Output proposal using the condition technique -> Maintain output determination for sales document -> Assign output determination procedure)

2.1. Create a new entry for ZA00, medium 6, function SP and order confirmation.

3. Maintain output determination procedure (Transaction V/32 or Sales & Distribution -> Basic Functions -> Output -> Output determination -> Output proposal using the condition technique -> Maintain output determination for sales document -> Maintain output determination procedure)

3.1. Check Assign output determination procedures -> Allocate sales document header (Transaction V/43) for the Output procedure being used for order OR and BA00 and you’ll find that it is linked to V10000

3.2. Select V10000 (Transaction v/32) and choose control

3.3. Add a new step for your new output type. Eg. Step 40 (Next Step in sequence), Counter, Type = ZA00 and requirement 22 (Requirement tells when the output is required to be fulfilled. Ie. After order confirmation, after goods issue, …)

4. Create condition records (Menu path: Logistics –

> Sales & Distribution -> Master data. Output -> Sales document – Create)

4.1. If required select the appropriate key combination (in this case the Sales org / customer relationship)

4.2. Enter the customer number (QWM000 in this case) and enter. The rest of the values should be read in except the partner number.

4.3. Enter the required partner number (QWM000 in this case). This is the partner that will be EDI’d the data. It is usefull when you have multiple SAP customers that need to send messages to 1 partner. Eg. All the Wal-Marts send their invoices to 1 office. You would then have a list of customers, relating to each Wal-Mart, pointing to 1 Wal-Mart partner that will receive all the EDI docs.

Advance shipping notification

Similarly the output type was copied from LALE to ZALE and linked to partner QWM000

Based on when a delivery note is created (Transaction V/36)

Invoice

Similarly the output type was copied from RD00 to ZD00 and linked to partner QWM000

Based on when a delivery goods issue is posted. (Transaction V/42)

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