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1. Introduction SAP R/3 – MM Dr. Djamal Ziani
King Saud University
2. ERP-Software: SAP R/3 The SAP R/3 is mainly structured in modules:
The top level are functional modules.
In this slide green modules belong to Logistics. These are: SD (Sales and Distribution), MM (Material Management), PP (Production Planning and Controlling), QA (Quality Assurance), PM (Plant Maintenance).
The accounting modules are red: FI (Financial Accounting), CO (Controlling, Cost Accounting), AM (Asset Management), PS (Project System).
Human Resource Management is the yellow module.
OC means office communication like emailing.
IS stands for Industry Solutions. These are branch-specific packages (e.g. automotive, retailing, oil industry).
Currently, HR is the only module which is separated from the other modulsThe SAP R/3 is mainly structured in modules:
The top level are functional modules.
In this slide green modules belong to Logistics. These are: SD (Sales and Distribution), MM (Material Management), PP (Production Planning and Controlling), QA (Quality Assurance), PM (Plant Maintenance).
The accounting modules are red: FI (Financial Accounting), CO (Controlling, Cost Accounting), AM (Asset Management), PS (Project System).
Human Resource Management is the yellow module.
OC means office communication like emailing.
IS stands for Industry Solutions. These are branch-specific packages (e.g. automotive, retailing, oil industry).
Currently, HR is the only module which is separated from the other moduls
3. 3 Components of Materials Management Purchasing (MM-PUR)
Purpose
The R/3 System consists of a number of components that are completely integrated with one another. This integration allows the various departments and units of an enterprise to share and maintain the same information.
Purchasing is a component of Materials Management (MM). The Materials Management (MM) module is fully integrated with the other modules of the SAP System. It supports all the phases of materials management: materials planning and control, purchasing, goods receiving, inventory management, and invoice verification.
The tasks of the MM Purchasing component are as follows:
External procurement of materials and services
Determination of possible sources of supply for a requirement identified by the materials planning and control system or arising directly within a user department
Monitoring of deliveries from and payments to vendors
Good communication between all participants in the procurement process is necessary for Purchasing to function smoothly.
Valuation
MM - Material Price Change (MM-IV-MP)
Balance Sheet Valuation (MM-IM-VP)
Actual Costing/Material Ledger (CO-PC-ACT)
Inventory Management and Physical Inventory (MM-IM)
Purpose
This component deals with the following tasks:
Management of material stocks on a quantity and value basis
Planning, Entry, and Documentation of all Goods Movements
Carrying out the Physical Inventory
Features
Material Master (LO-MD-MM)
Purpose
The material master contains information on all the materials that a company procures or produces, stores, and sells. It is the company's central source for retrieving material-specific data. This information is stored in individual material master records.
MRP Procedures in Consumption-Based Planning
Use
In consumption-based planning, the following MRP procedures are available:
Reorder point procedure
Forecast-based planning
Time-phased materials planning
Logistics Invoice Verification (MM-IV-LIV)
Purpose
Logistics Invoice Verification is a part of Materials Management (MM). It is situated at the end of the logistics supply chain that includes Purchasing, Inventory Management, and Invoice Verification. It is in Logistics Invoice Verification that Incoming Invoices are verified in terms of their content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial Accounting.
Product Catalog
A number of media can be used as vehicles for presentations, including:
Print media
CD-ROM
Online services (such as internet, T-Online, CompuServe, AOL)
Information kiosks at the point of purchase
The Product Catalog functionality comprises a programming interface (Business API) for accessing the data and integrated maintenance of product catalog-related data. This data comprises:
The layout of the product catalog
The materials and prices in the product catalog
Texts
Multi-media objects (graphics, sound documents, video clips etc.).
Service Master
MM External Services Management provides a basic process for the procurement of externally performed services. This basic process comprises the following functionality:
Foreign Trade
Official customs brokers are licensed by the customs service to assist you with import and export transactions. They have the responsibility to ensure that all foreign trade customs procedures are followed completely and comply to legal regulations. They also ensure that the duties collected from your company are turned over to the government when they become due.
Although the services of a customs broker replace the need for your company to handle the necessary tasks associated with foreign trade, they can be very costly.
SAP's FT system incorporates all of the necessary checks and balances necessary to ensure that your import and export transactions are handled lawfully and that the duties owed to the customs authorities are calculated instantly and accurately. Purchasing (MM-PUR)
Purpose
The R/3 System consists of a number of components that are completely integrated with one another. This integration allows the various departments and units of an enterprise to share and maintain the same information.
Purchasing is a component of Materials Management (MM). The Materials Management (MM) module is fully integrated with the other modules of the SAP System. It supports all the phases of materials management: materials planning and control, purchasing, goods receiving, inventory management, and invoice verification.
The tasks of the MM Purchasing component are as follows:
External procurement of materials and services
Determination of possible sources of supply for a requirement identified by the materials planning and control system or arising directly within a user department
Monitoring of deliveries from and payments to vendors
Good communication between all participants in the procurement process is necessary for Purchasing to function smoothly.
Valuation
MM - Material Price Change (MM-IV-MP)
Balance Sheet Valuation (MM-IM-VP)
Actual Costing/Material Ledger (CO-PC-ACT)
Inventory Management and Physical Inventory (MM-IM)
Purpose
This component deals with the following tasks:
Management of material stocks on a quantity and value basis
Planning, Entry, and Documentation of all Goods Movements
Carrying out the Physical Inventory
Features
Material Master (LO-MD-MM)
Purpose
The material master contains information on all the materials that a company procures or produces, stores, and sells. It is the company's central source for retrieving material-specific data. This information is stored in individual material master records.
MRP Procedures in Consumption-Based Planning
Use
In consumption-based planning, the following MRP procedures are available:
Reorder point procedure
Forecast-based planning
Time-phased materials planning
Logistics Invoice Verification (MM-IV-LIV)
Purpose
Logistics Invoice Verification is a part of Materials Management (MM). It is situated at the end of the logistics supply chain that includes Purchasing, Inventory Management, and Invoice Verification. It is in Logistics Invoice Verification that Incoming Invoices are verified in terms of their content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial Accounting.
Product Catalog
A number of media can be used as vehicles for presentations, including:
Print media
CD-ROM
Online services (such as internet, T-Online, CompuServe, AOL)
Information kiosks at the point of purchase
The Product Catalog functionality comprises a programming interface (Business API) for accessing the data and integrated maintenance of product catalog-related data. This data comprises:
The layout of the product catalog
The materials and prices in the product catalog
Texts
Multi-media objects (graphics, sound documents, video clips etc.).
Service Master
MM External Services Management provides a basic process for the procurement of externally performed services. This basic process comprises the following functionality:
Foreign Trade
Official customs brokers are licensed by the customs service to assist you with import and export transactions. They have the responsibility to ensure that all foreign trade customs procedures are followed completely and comply to legal regulations. They also ensure that the duties collected from your company are turned over to the government when they become due.
Although the services of a customs broker replace the need for your company to handle the necessary tasks associated with foreign trade, they can be very costly.
SAP's FT system incorporates all of the necessary checks and balances necessary to ensure that your import and export transactions are handled lawfully and that the duties owed to the customs authorities are calculated instantly and accurately.
4. 4 Organizational Data A hierarchy in which the organizational units in an enterprise are arranged according to tasks and functions
Are static data and are rarely changed
The definition of organization units is a fundamental step, it is a critical factor in how the company will be structured Master data does not change very often
Org data – should not change
Transaction data (application data) – changes every transaction
If you setup organizational data and wish to change it, it very well may be more work than the initial setup.
Master data does not change very often
Org data – should not change
Transaction data (application data) – changes every transaction
If you setup organizational data and wish to change it, it very well may be more work than the initial setup.
5. Organizational Structures
6. 6 Organizational Structures Client
Company
Plant
Valuation Area
Storage Locations
Purchasing Organizations
Purchasing Groups
There are five organizational structures that we will define for our material management
Plant
Valuation area
Storage locations
Purchasing organizations
Purchasing groups
There are five organizational structures that we will define for our material management
Plant
Valuation area
Storage locations
Purchasing organizations
Purchasing groups
7. Organizational Structures: Client The client is a unit within an SAP R/3 system that is self-contained both in legal and organizational terms and in terms of data, with separate master records and an independent set of tables.
From a business viewpoint, the client represents a corporate group, for example.
Client: 3 numerical digits
8. Organizational Structures: Company The company is the smallest organizational unit of external accounting for which a complete, self-contained bookkeeping system can be replicated.
A company code represents an independent unit producing its own balance sheet, for example, a company within a corporate group (client).
Company code = 4 characters
9. 9 Organizational Structures: Plant Lowest valuation area
Organizational level where Material Requirements (MRP) runs
Generally used to describe a production site, a distribution center or centralized warehouse
May be a physical or logical unit Plant is a physical or logical location
It may be a warehouse: PHYSICAL
Vendor are in warehouse (Vendor managed inventory)
Customer site (consigned inventory): LOGICAL
Can do multiple plants within the same physical structure
We value material at the plant level.
Planning done at the plant not organizational level
The plant is an operating area or branch within a company.
The plant is embedded in the organizational structure as follows:
The plant is assigned to a single company code. A company code can have several plants.
Several storage locations in which material stocks are managed can belong to a plant.
A single business area is assigned to a plant and to a division.
A plant can be assigned to several combinations of sales organization and distribution channel.
A plant can have several shipping points. A shipping point can be assigned to several plants.
A plant can be defined as a maintenance planning plant.
A plant has the following attributes:
A plant has an address.
A plant has a language.
A plant belongs to a country.
A plant has its own material master data. You can maintain data at plant level for the following views on a material master record in particular: MRP, Purchasing, Storage, Work scheduling, Production resources/tools, Forecasting, Quality management, Sales, Costing.
The plant plays an important role in the following areas:
material valuation
If the valuation level is the plant, the material stocks are valuated at plant level. If the valuation level is the plant, you can define the material prices for each plant. Each plant can have its own account determination.
inventory management
The material stocks are managed within a plant.
MRP
Material requirements are planned for each plant. Each plant has its own MRP data. Analyses for materials planning can be made across plants.
production
costing
In costing, valuation prices are defined only within a plant.
plant maintenance
If a plant performs plant maintenance planning tasks, it is defined as a maintenance planning plant. A maintenance planning plant can also carry out planning tasks for other plants (maintenance plants).
Plant is a physical or logical location
It may be a warehouse: PHYSICAL
Vendor are in warehouse (Vendor managed inventory)
Customer site (consigned inventory): LOGICAL
Can do multiple plants within the same physical structure
We value material at the plant level.
Planning done at the plant not organizational level
The plant is an operating area or branch within a company.
The plant is embedded in the organizational structure as follows:
The plant is assigned to a single company code. A company code can have several plants.
Several storage locations in which material stocks are managed can belong to a plant.
A single business area is assigned to a plant and to a division.
A plant can be assigned to several combinations of sales organization and distribution channel.
A plant can have several shipping points. A shipping point can be assigned to several plants.
A plant can be defined as a maintenance planning plant.
A plant has the following attributes:
A plant has an address.
A plant has a language.
A plant belongs to a country.
A plant has its own material master data. You can maintain data at plant level for the following views on a material master record in particular: MRP, Purchasing, Storage, Work scheduling, Production resources/tools, Forecasting, Quality management, Sales, Costing.
The plant plays an important role in the following areas:
material valuation
If the valuation level is the plant, the material stocks are valuated at plant level. If the valuation level is the plant, you can define the material prices for each plant. Each plant can have its own account determination.
inventory management
The material stocks are managed within a plant.
MRP
Material requirements are planned for each plant. Each plant has its own MRP data. Analyses for materials planning can be made across plants.
production
costing
In costing, valuation prices are defined only within a plant.
plant maintenance
If a plant performs plant maintenance planning tasks, it is defined as a maintenance planning plant. A maintenance planning plant can also carry out planning tasks for other plants (maintenance plants).
10. 10 Organizational Structures: Valuation Area The valuation area determines at which level a material is valuated (inventory value is established)
SAP R/3 allows valuation at the company code or plant level, but recommends valuation area be set at the plant level.
Means each plant can have its own material prices and account determination We are going to create at the plant level.
System defaults to plant level.
Define valuation level
You define the valuation level by specifying the level at which material stocks are valuated. You can valuate material stocks at the following levels:
Plant level
Valuation must be at this level in the following cases:
If you want to use the application component Production Planning (PP) or Costing
Company code level
The decision you make is valid for the whole client. You are recommended setting material valuation at plant level.We are going to create at the plant level.
System defaults to plant level.
Define valuation level
You define the valuation level by specifying the level at which material stocks are valuated. You can valuate material stocks at the following levels:
Plant level
Valuation must be at this level in the following cases:
If you want to use the application component Production Planning (PP) or Costing
Company code level
The decision you make is valid for the whole client. You are recommended setting material valuation at plant level.
11. 11 Organizational Structures: Storage Location Subdivision of a plant
Where materials are managed (inventory management)
Raw Materials
Maintenance, Repair, and Other (MRO)
Finished Product
May be a physical or logical unit
Maintain storage location
A storage location is the place where stock is physically kept within a plant.
A storage location has the following attributes:
There may be one or more storage locations within a plant.
A storage location has a description and at least one address.
It is possible to store material data specific to a storage location.
Stocks are managed only on a quantity basis and not on a value basis at storage location level.
Physical inventories are carried out at storage location level.
A storage location can be assigned to a warehouse number in the Warehouse Management System . You can assign more than one storage location to the same warehouse number within a plant.
Storage locations are always created for a plant.
Could be inventory management
Production floor
Quality
Engineering bin
Maintain storage location
A storage location is the place where stock is physically kept within a plant.
A storage location has the following attributes:
There may be one or more storage locations within a plant.
A storage location has a description and at least one address.
It is possible to store material data specific to a storage location.
Stocks are managed only on a quantity basis and not on a value basis at storage location level.
Physical inventories are carried out at storage location level.
A storage location can be assigned to a warehouse number in the Warehouse Management System . You can assign more than one storage location to the same warehouse number within a plant.
Storage locations are always created for a plant.
Could be inventory management
Production floor
Quality
Engineering bin
12. Organizational Structures: Purchasing Organizations An organizational unit responsible for procuring materials or services for one or more plants and for negotiating general conditions of purchase with vendors.
The purchasing organization assumes legal responsibility for all external purchase transactions.
13. Purchasing organization here you can see how the POrg, the plants and PG‘s are linked up ? responsible, assigned tohere you can see how the POrg, the plants and PG‘s are linked up? responsible, assigned to
14. Organizational Structures: Purchasing Organization Groups
15. Inventory Management with a Warehouse Management System Here you can see an overview of the hierarchical structure including the objects of the warehouse management
IDES = exemplary company maintained in the SAP system
different Storage locations are assigned to a warehouse numberHere you can see an overview of the hierarchical structure including the objects of the warehouse management
IDES = exemplary company maintained in the SAP system
different Storage locations are assigned to a warehouse number
16. The Module MM – Main Functions I will talk about the material master later
before you order the material from a vendor you have to plan the quantites you need in each period
next, the ... can be mentioned
? user department
...
after you have received the goods, the vendor will make out an invoice and send it to you. Before paying the invoice has to be verified ? compare with PO, delivery notes etc. I will talk about the material master later
before you order the material from a vendor you have to plan the quantites you need in each period
next, the ... can be mentioned
? user department
...
after you have received the goods, the vendor will make out an invoice and send it to you.Before paying the invoice has to be verified ? compare with PO, delivery notes etc.
17. MM – interdependencies to other modules talking of the inter-depENdencies of MM one can say that all of the other modules regularly access data maintained and updated in the module MM
like the material master for example, which is relevant for prod. planning and sales & distrib.
also: requirements planning....
talking of the inter-depENdencies of MM one can say that all of the other modules regularly access data maintained and updated in the module MM
like the material master for example, which is relevant for prod. planning and sales & distrib.
also: requirements planning....
18. Basic Data Master records - include information about
vendors
material and services to be procured
the relation between 1. and 2. (purchasing info record) e.g. prices / terms and conditions
bills of material for
production planning
purchasing
sales and distribution
withdrawal of Material There are two types of basic data in the module MMThere are two types of basic data in the module MM
19. Structure of the Vendor Master Record different sectionsdifferent sections
20. Create a Vendor
21. Create a Vendor
22. Create a vendor
23. Create a Vendor
24. Create a Vendor
25. Create a Vendor
26. Create a Vendor
27. Create a Vendor
28. Views on the Material Master Record
29. Demo: Create Material Master
30. Demo: Create Material Master
31. Demo: Create Material Master
32. Demo: Create Material Master
33. Demo: Create Material Master
34. Demo: Create Material Master
35. Demo: Create Material Master
36. Demo: Create Material Master
37. purchasing info record so far: considered information about
material
vendors
now: talk about information relating to the combination
ERMso far: considered information about
material
vendors
now: talk about information relating to the combination
ERM
38. Purchasing Process the process has the following main steps:the process has the following main steps:
39. Create Purchase Order (PO) 3 possibilities of ordering material3 possibilities of ordering material
40. Purchasing Process Create a requisition
First release of requisition
Create RFQ (Request for Quotation) with reference to requisition
Create PO (Purchase Order) with reference to RFQ
Department receives material ordered (GR)
Department pays invoice (MIRO).
41. Purchase Requisition
42. Request for Quotation
43. Purchase Order
44. Create Purchase Requisition
45. Create Purchase Requisition
46. Create Purchase Requisition
47. Create Purchase Requisition
48. Demo: Create Purchase Order
49. Demo: Create Purchase Order
50. Demo: Create Purchase Order
51. Demo: Create Purchase Order
52. Posting an Order Entry (Goods Receipt)
53. Goods Receipt: Transfer posting
54. Demo: Posting Order Entry (Goods Received)
55. Demo: Posting Order Entry (Goods Received)
56. Demo: Posting Order Entry (Goods Received)
57. Demo: Posting Order Entry (Goods Received)
58. Demo: Posting Order Entry (Goods Received)
59. Invoice Verification
60. Invoice Verification
61. Create Invoice
62. Create Invoice (contd..)
63. Create Invoice (contd..)
64. Create Invoice (contd..)
65. Demo: Invoice Verification
66. Demo: Invoice Verification
67. Demo: Invoice Verification
